(Bloomberg) -- GigaCloud Technology Inc., a Hong Kong-based online marketplace provider, surged 28% in its debut on Thursday, joining a string of smaller companies from Asia that are still tapping the US market to sell shares in spite of a crackdown from regulators in Washington and Beijing.
GigaCloud opened at $19.20 at the Nasdaq in New York, up 57% from its original offer price of $12.25 per share, raising $36 million. It pared some of the earlier gains to close at $15.69. E-commerce giant JD.com Inc. owns a 12% stake in the business-to-business trading platform specializing in merchandise for the furniture sector.
GigaCloud joined 11 other companies, excluding blank-check firms, based in China and Hong Kong that opted to sell shares in New York this year even as a spat between US and China over financial audits increases the risk of delistings. Sharp swings in share prices on some of the trading debuts have also grabbed regulator’s attention. In two recent examples, AMTD Digital Inc. soared more than 32,000% following its IPO in July, while Magic Empire Global Ltd. saw a 2,325% spike in its debut session earlier this month.
David Lau, GigaCloud’s chief financial officer told Bloomberg the company doesn’t generate revenue from China, which in turn may diminish regulatory oversight. “Our business isn’t classified as a sensitive industry by the Chinese government, and that really helps give comfort to regulators and investors,” he said. Still, GigaCloud plans to explore switching its Chinese auditor to a US-based accounting firm to hedge against a potential delisting, Lau said.
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Listing in the US over Hong Kong provides better access to Wall Street’s funding for a company like GigaCloud whose business is focused in the country, said Lau.
“A US listing would help us achieve not just valuation but also the profile we need to grow into the next phrase,” he said.
(Updates with price at close)
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