- The Nasdaq has halted the preparations for at least four small Chinese companies’ initial public offerings (IPOs) while it probes short-lived stock rallies of such firms following their debuts.
- According to attorneys and bankers that work on such stock launches, the big board decided to stay the pending IPOs amid a boom in the shares of Chinese companies that raise tiny amounts, often $50 million or less, in their IPO.
- These companies will then see stocks rise up to 2,000% in their IPOs, only to plummet in the days that follow, punishing investors who are brave enough to wager on penny stocks.