Another Chinese Firm Unleashes The Euphoria On Wall Street Again

Wall Street has experienced a striking phenomenon this summer. Three Asian companies have made their debut in the Yankee market with a euphoric investor backing that is difficult to explain. The last to go public and cause this barrage was the Chinese Addentax Group Corp., which closed its first session 8,654% higher.

Addentax is an industrial textile and logistics services company that debuted on the Nasdaq on Wednesday. At the start of trading, the company soared 13,000%. Purchases moderated as the session progressed but, even so, at the close the revaluation meant multiplying its value by 24 times. From debuting at $27 a title to ending its first day on the American floor at $656.5.

That means the firm is already more valuable than a third of the S&P 500 stocks, according to calculations by Bloomberg , an achievement that has cost it just one session. Its capitalization has shot up to 20,000 million dollars.

What has happened with Addentax is not new , as it is the third time it has happened in recent weeks and the eighth so far this year. With all these Asian premieres in New York, the same thing has happened: stocks that have run amok into the five digits and have closed with more than significant gains. These operations have something else in common and that is that nobody understands the reasons that lead to these movements in the stock market. It is unknown what arouses the investment euphoria.

This summer, we found two such examples in the premieres of AMTD and Magic Empire. “Both also [like Addentax] grabbed headlines and their shares mysteriously soared by thousands of percentage points, despite their opaque fundamentals,” analyzes Bloomberg , which also notes that neither of them has surprising numbers.

Remember the ‘meme’ actions . Addentax is trading with a lot of volatility. This Thursday, in the premarket it has risen about 18% and, later, it has fallen to 1%. In fact, at its premiere a day ago, the listing had to be suspended and resumed up to 20 times.

United States vs. China
On the other hand, it is worth remembering the front that the United States and China maintain in the stock markets. The North American country is making an exclusion list of Asian companies that are listed on its market. In it, they meet giants with Alibaba. For a Chinese to want to list on the other side of the world is not easy, since the transparency requirements demanded by the market and Beijing’s limitations on companies sharing information abroad are often incompatible. For this reason, it is also surprising that some firms continue to be encouraged, despite the risks involved.

Outside of Wall Street, the Asian country is once again going against the tide. Chinese releases in their own market are breaking records , with a 44% higher box office from January to August compared to the same period a year ago. China is an exception in a year where IPOs in Europe or the US market are holding back due to poor market conditions.

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