NetEase (NTES 2.85%) and JD.com (JD -0.74%), the two Chinese technology companies in the crosshairs of U.S. lawmakers, are gearing up to list on the Hong Kong Exchange next month.
Sources told Reuters NetEase, the Internet company, will list on the Hong Kong Exchange via a secondary offering on June 11. The week after will be JD.com, the e-commerce giant's turn. Combined the two tech stocks could bring in $5 billion. NetEase is aiming to raise as much as $2 billion via the listing while JD.com could raise $3 billion, selling about 5% of its shares outstanding, reported Reuters.
IMAGE SOURCE: GETTY IMAGES.
Both companies trade on the Nasdaq in the U.S. and are moving ahead with their Hong Kong listings amid rising tensions between Beijing and the White House. Earlier this week the U.S. Senate passed legislation known as the Holding Foreign Companies Accountable Act or HFCAA, which requires companies outside of the U.S. to meet criteria or face delisting on U.S. stock exchanges. Some of the rules include companies proving they aren’t controlled by a foreign government. The companies would also have to undergo an audit by the Public Company Accounting Oversight Board. The bill is making its way through the House of Representatives. If it passes there, it will move to President Donald Trump to sign into law.
If it does pass it could impact Chinese companies that trade on the U.S. exchanges including JD.com and Netease. Both are on a list of more than 100 China-based companies that could feel the force of the new legislation.
