Hong Kong investors’ greed got the better of them again in March when they piled into the shares of a newly listed US integrated circuits designer, 02Micro International. Blinded by the recent euphoria surrounding new IPOs in Hong Kong, many of which have produced stellar returns once dealings began, investors bid the shares to almost twice their initial listing value.
The only thing the investors overlooked was that 02Micro International never launched an IPO but listed in Hong Kong by way of an introduction. The reference price from its Nasdaq listing suggested an altogether different valuation. Once investors had realized their mistake, the price plummeted, leaving the foolish and careless to ponder their losses.