The wild stock movements of several small cap Chinese companies — and the U.S. firms that advise them — are raising eyebrows on Wall Street.
Illustration by Tim Marrs
Earlier this summer, a small Chinese company based in the seaside city of Xiamen went public on the Nasdaq Stock Market. It immediately turned into a sensation. The stock price for Pop Culture Group soared 1,200 percent in two days — from $6 a share to $78 a share — helping the company raise $37.2 million dollars.
Pop Culture Group’s allure, while not anticipated, is a common one for investors: a Chinese company with a niche concept promising to take its massive domestic market by storm. In the prospectus, for instance, the company marketed itself as having “a deep understanding of the younger generation, [and] a highly-recognized brand name in the hip-hop culture and street dance industries.”
Data: Yahoo! Finance
Pop Culture Group hosts promotional hip-hop themed events in China. If a new store is opening in a shopping mall, the company sets up a stage with laser lights, loud music, and hip hop dancers to attract interest in the new business. The company also hosts
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