American vs. Chinese Tech Initial Public Offerings

Open Access
Author:
Smith, Brett Michael
Area of Honors:
Finance
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
  • Michelle Lowry, Thesis Supervisor
  • James Alan Miles, Honors Advisor
Keywords:
  • initial public offering
  • IPO
  • Chinese
  • American
  • U.S.-listed
  • tech
  • technology
Abstract:
The number of Chinese technology firms choosing against the largest IPO markets of the world – the Hong Kong and Shanghai Markets – is rapidly increasing. Rather than holding an initial public offering in, perhaps, one of these more sensible locations, young Chinese tech firms are electing to raise funds in the United States. By year 2007, the number of U.S.-listed Chinese tech firms is substantial enough for investors to take notice. How these tech firms relate to comparable American tech firms is an important factor in overall understanding of the tech industry. Using a combination of stock price returns, historical price-to-earnings ratios, and price-to-sales ratios, the following study determines that U.S.-listed Chinese tech stocks are not always worth the investment.