• Ernie Diaz

Secondary Guessing

If you’re unaware of how three-alarm hot Chinese tech secondaries are right now, you’re not alone. The financial news industry understandably focuses on public companies, where facts and details can be verified.

The only thing verifiable about pre-IPO shares in companies such as Didi, Manbang, & Jindong Logistics is that prices can and will rise, by the day. As a result, many industry professionals are miffed. By the time they have a buyer’s LOI signed and delivered, the company’s valuation has been hyped up another few billion, another Chinese unicorn IPO like Kuaishou has popped, and the seller wants more money.

“The hype around Chinese tech secondaries is indeed unprecedented,” says Jimmie Jeremejev. “So is the resultant chaos, unfortunately. We have access to many LPs and GPs on the cap tables of these companies that want to, or even have to sell their shares. However, valuations are being driven by the expected IPO pop, resulting in higher and higher prices, more and more demand, and price offers that are only good for a day or so.”

20 views0 comments

Recent Posts

See All

Let's tick off all China's bad news, before getting to the good news. Good news, that is, for investors looking to diversify their global portfolios. Not so good for Gordon Chang and other patient app

Like Hollywood, the western press is invested in narratives and emotional manipulation. Unlike Hollywood, that press has no compunction about skipping the third act of a story, if it doesn't fit that

Politics makes shortchanged bedfellows. As we've written before and will no doubt write again, the paradigm that China stocks = the VIEs of giant tech companies that make it to New York is keeping ave