Scrutinizing Technology Wild Stallions: Regulators Care

April 13, 2021

Does government regulation bring some adulting to technology companies running wild? Yes, if the information in the weird orange newspaper is accurate. “Chinese Tech Groups Scrap IPOs at Record Pace after Ant Listing Pulled” reports [Note: You may be asked to pay to read the orange one’s write up. Sorry. You will have to subscribe]:

Companies cancel plans to sell shares on Shanghai’s Star Market as regulatory scrutiny rises.

Will this tactic work in the longer term? Nope, but it does suggest that some controls are applied to frisky tech horses.

It is possible that these stallions will work at dude ranches, happily carrying semi-authentic cow pokes to the faux cook out. But that’s a long shot.

Here’s a more practical response in my opinion:

  • Look elsewhere. That’s the greener pastures approach. What type of controls can one expect in London or a more exotic location in the EU
  • Pivot. There are plenty of doctors and dentists who are eager to invest in a whiz bang high tech stallion. With some lawyering, there are opportunities for private deals.
  • Look for Softbank-type outfits, get some cash, and leave it to the wizards in the lead funding outfit to find a buyer.

The MBAs and legal eagles can find other options as well.

The main point is that regulation often spurs innovation in the financial sector. How about an NFT for Chinese high tech companies? How about some regulation in the US of FAANGs?

No. Okay.

Stephen E Arnold, April 13, 2021


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