When the Nasdaq stock exchange filed this week to tighten its listing rules with the US Securities and Exchange Commission, there was barely a mention of China. But the real target of the restrictions was hard to miss.
Just a few days earlier the technology-focused exchange had issued a delisting notice to Luckin Coffee, the Chinese chain that said last month that certain employees conspired to “fabricate” hundreds of millions of dollars of sales. On Monday Nasdaq said its new rules were designed “to preserve and strengthen the quality of, and public confidence in, the Nasdaq market, and . . . enhance investor confidence”.
But the changes, which effectively forbid initial public offerings from countries such as China that raise less than $25m, were filed on the same day that GSX Techedu — another New York-listed Chinese company with a multibillion-dollar market capitalisation — was targeted in a new report from Muddy Waters. The short-seller alleged, among other things, that about 80 per cent of the company’s users were bots. The company has denied the allegations.