Hong Kong stocks run up before their listings. They fall after. This happens over and over. The pattern repeats with perfect consistency.
You'd think someone would notice.
The pre-debut runup exists because institutional investors get allocation at the IPO price while retail traders watch from the sidelines. The shares pop on day one. Retail buys at the top. Institutions sell into the excitement. The stock then proceeds to die a slow death over the following months.
This is not a glitch in the system. This is the system.
Hong Kong wants to compete with Wall Street for IPO supremacy. The strategy appears to be: process the same scam but with more efficiency. List companies faster. Pump them harder before debut. Let them collapse more spectacularly afterward. Volume over quality. Quantity over results.
The article frames this as a "performance problem" as if someone accidentally installed the wrong software. The performance is working exactly as designed. Shares perform up before listing. They perform down after listing. Both performances extract maximum fees and minimum consequences for everyone except the bag holders.
Wall Street pioneered the IPO pump-and-dump over decades of careful refinement. Hong Kong studied the model and said "we can do that in half the time." Admirable efficiency. The American version at least pretends the company might survive its first year. Hong Kong skips the pretense.
Retail traders keep buying these listings despite watching the previous hundred follow identical trajectories. They see a stock up forty percent before it trades publicly and think "yes, this is where I should invest my money." The definition of optimism: believing you'll be the first person to profit from being late to a party you weren't invited to.
Hong Kong's IPO market doesn't have a performance problem. It has a performance guarantee.
Photo by Frida Aguilar Estrada on Unsplash
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