It’s the financial world’s version of never leaving mom & dad’s house: why list, when you can keep getting fresh rounds of investment? Why move out into the real world, when you know the ‘rents are going to have to give you a car, the rec room, heck, the whole estate eventually- anything to preserve the belief their baby is a winner?
This slacker philosophy is propelling secondaries to frothy oceans of speculation and frenzied trading. To pour oil on those troubled waters, enter the Chinese government, stage right.
“The official China strategy is at odds with ‘Chinese Wall Street’s’,” says Jimmie Jeremejev. “The larger economic goal is a booming Star Market, and retail investors who can enjoy some of the upside created by the copious government investment that goes into this herd of Chinese tech unicorns being steadily foaled.”
So are current raging (and aging) stallions such as Didi and Bytedance a dying breed? “These companies are coming on eight and nine years old, respectively,” says Edward Lehman. “Traditionally, that’s young. In tech terms, it’s middle-aged. Look for future Chinese tech darlings to be taken to market in three to five years.”