Hong Kong watchdog investigates Cloudbreak Pharma for ‘rigged’ IPO, suspends its shares
Hong Kong’s Securities and Futures Commission (SFC) has directed the stock exchange to suspend trading of US-based biotech firm Cloudbreak Pharma pending an investigation into its US$78 million initial public offering (IPO) last year. “The SFC has serious concerns that Cloudbreak’s initial public offering may have been rigged to create an artificial impression of demand for Cloudbreak’s shares,”…
Hong Kong's Securities and Futures Commission (SFC) has initiated an investigation into biotechnology firm Cloudbreak Pharma following allegations of a "rigged" IPO. The SFC has directed the Hong Kong stock exchange to suspend trading of the company's shares, citing concerns that the IPO may have been manipulated to create an artificial demand for its shares.
This action is aimed at maintaining an orderly and fair market and protecting the interests of investors. Cloudbreak Pharma, which focused on developing treatments for eye diseases, raised HK$611.88 million (US$78.45 million) in its IPO, with the retail portion being oversubscribed 77 times. However, the company's share price plummeted 39% on the first day of trading, and it has since lost over 90% of its IPO value.
The shares were suspended at 9am on the day of the suspension announcement. Cloudbreak Pharma's founder and CEO, Ni Jinsong, had previously worked for pharmaceutical giants Pfizer and Allergan before establishing the company in California in 2015. The firm's IPO, which was conducted under Hong Kong's Chapter 18A rules designed for pre-revenue biotech companies, raised significant funds for the sector.
Written by urgent.news from South China Morning Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
This story
This is one outlet's version. Read the fullest account.
