Nasdaq reviews stock allocations after mysterious IPO gains

The Nasdaq is asking for more details regarding stock allocations for small-cap initial public offerings as it heightens scrutiny in a corner of the market that has seen a number of huge price swings.

According to Gordon Tsang, a partner at law firm Stevenson, Wong & Co. The Nasdaq also requested details on the amount of shares awarded and the brokers involved, said Tsang, who advised on recent state IPOs. States, including Magic Empire Global and Top Financial Group.

The details follow a Bloomberg News report last week that the Nasdaq increased its scrutiny following outsized stock price swings in more than a dozen small-cap companies that debuted in the United States. United this year. The tighter controls could add uncertainty to the timing of several planned IPOs, including Hongli Group Inc., Lichen China as well as US company Alopexx Inc.

“The new Nasdaq requests are aimed at improving transparency on investments and connected transactions in IPOs, much like what Hong Kong regulators asked for a few years ago,” Tsang said in an interview. “We are optimistic that the deals will eventually be completed and successfully listed.”

A Nasdaq representative declined to comment.

The lag between the price of an IPO and its first day of trading is much shorter in the United States than in Hong Kong, where there is typically a five-day lag. In the United States, underwriters are not routinely prompted to submit share allotment details, in part due to the limited time available for review.

In Hong Kong, the regulator halted some trading in 2017 over concerns that there were anomalies in the allocation of shares of some small-cap listings that could jeopardize an orderly open market in its infancy.

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James V. Hayes