Headlines By

Publisher's Notes: Going Private is Back in Vogue

Dear Friends:

I thought I was mostly over having to report news on China-based/US listed companies “Going Private.” Apparently, that is not the case. Both Taomee and Mindray recieved “Going Private” proposal this week. CMGE, Sungy Mobile, Jiayuan, and Xueda Education are up to bat, among others.

In general, I just report the news, good or bad, it’s just the news to me. But on some issues I get a bit fatigued. When I write about companies going private, it feels like I am a film director and now I am watching the film backwards. What’s more, I think when companies relatively new to the public markets go private, it undermines the markets overall and is often additionally demoralizing for the individual investor.

But most importantly, in many cases, I contend often these executives who personally profit on the IPOs and then turn around only a few years later and take their companies private are cowardly and greedy.

Since I launched CBK in August 2006, I have mostly enjoyed writing about the sector of China-based/US listed companies. I had considered it a privilege to have found this niche, because I think it is historically significant. Ultimately, Nixon went to China a nano second ago. But today I had to slug through this edition of CBK Digest. And once I publish it I am going to take LONG WALK, to cool down.

What I really wish is that there were stronger laws as to how much executives can take out of a company when it goes public (ditto the investment bankers). And that lock-ups were MUCH longer and in definitive stages, for instance when a company becomes profitable.

One of those stages should be pegged to the profit of investors who were NOT allotted pre-IPO pricing. At the very least, of that group, those who bought in early. As it stands, it seems like being the individual investor–buying early in a stock–is the “mark” or the “rube” for all the other parties who want cash out.

News below.

Janet Stites
Publisher & Editor
China Business Knowledge (CBK)