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Surge in Chinese listings drives boom for US small-cap IPO market

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Surge in Chinese listings drives boom for US small-cap IPO market

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The volatile market for small US initial public offerings is “booming” thanks to a surge of Chinese listings on New York’s Nasdaq as companies race to beat a rule change that blocks the smallest deals.

The surge in listings kicked off late last year with 42 small offerings in the last three months of 2024, followed by 41 in the first quarter of this year — the two busiest quarters in records back 15 years, according to equity capital markets group Capital Markets Gateway (CMG). This was up from 20 in the second quarter of 2024 and 29 in the third.

Fifty-three of the past two quarter’s listings were from China and Hong Kong, with only 18 from the US, and all but nine on Nasdaq. CMG’s data excludes special purpose acquisition vehicles, which raise money in order to take over a private business.

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“The microcap IPO market is booming,” said Matthew Kennedy, a senior strategist at Renaissance Capital, citing small Chinese companies in sectors from pharmaceuticals to construction. “It’s a highly speculative area,” he said, with many investors losing out because most of the stocks eventually fall far below their initial offer price.

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The IPOs came ahead of a raft of policy changes enacted by Nasdaq, effective as of April 11, which include requiring companies listing on its lowest rung under certain standards to raise at least $15mn. The Securities and Exchange Commission said Nasdaq’s new rules would “promote fair and orderly markets” and “protect investors and the public interest”.

Daniel McClory, head of equity capital markets and China at US underwriter Boustead Securities, said he had “30 IPOs in process right now and more than a third are for [companies in] south-east Asia and Greater China”.

The market for large-cap listings has meanwhile disappointed hopes of a revival under Donald Trump. Waves of market volatility around the president’s tariff announcements led bankers to postpone several hotly anticipated tech IPOs while other large listings received a cool reception.

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This has not stopped a flurry of sub-$50mn deals since tariffs shook markets in April. Small IPOs have continued despite Nasdaq raising the bar last month — with eight further deals since the rule change.

“Explosive returns” from companies such as Hong Kong-based Diginex, an ESG data group, and Chinese group EPWK Holdings, a crowdsourcing platform, “can fuel interest from traders hoping for quick gains”, said Kennedy.

Line chart of Share price, $ showing Shares in EPWK surged in late April but collapsed in early May

Shares in Diginex have climbed 1,375 per cent since it listed in January. Last Tuesday, it said UAE royal Sheikh Mohammed bin Sultan bin Hamdan Al Nahyan had struck a $300mn deal giving him the right to buy 6.75mn of its shares before the end of the year.

EPWK had risen 470 per cent in the months after its February market debut, but plunged 75 per cent last Monday.

The market for these small offerings is dominated by amateur traders, who are often more willing to jump on perceived bargains in the stock market during times of disruption when big money managers stay away.

The US Financial Industry Regulatory Authority in 2023 warned investors about “unusual price increases on the day of or shortly after the IPOs of certain small-cap issuers, most of which involve issuers with operations outside the US” and “IPOs raising less than $25mn”.

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The average value of money raised in the small IPOs tracked by CMG in the six months to March was around $9mn.

Brokers say there could be more small IPOs if market conditions improve. “If the market settled down and co-operated we could do an IPO a week,” McClory said. “As it is, we’re targeting about one a month.”

The two most prolific underwriters in the space — Dominari Securities and RF Lafferty — have each taken seven companies public this year, including Chinese “machine vision” company Lianhe Sowell and Hong Kong hotpot chain MasterBeef.

RF Lafferty is headquartered in the Trump Building in New York’s Financial District. Dominari Securities, which acted as lead underwriter for Diginex’s IPO, is a subsidiary of Dominari Holdings, a fintech group based about four miles north in Trump Tower. 

Shares in Dominari Holdings rose 580 per cent in the six weeks before a February 11 filing revealing that the president’s sons Donald Trump Jr and Eric Trump had joined its advisory board, the Financial Times reported last month.

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Dominari and RF Lafferty did not respond to requests for comment.

The rush of smaller Chinese IPOs comes as concerns swirl among some investors over whether Trump will delist some Chinese stocks from US exchanges amid trade tensions with Beijing.

One banker at a small US broker said some Chinese companies listing in the US recently had “inverted their corporate structure” to obscure where they carry out the bulk of their business. He said that Chinese companies with an overseas subsidiary were converting their operating company into the parent company “to sanitise the Chinese nature of the listing”.

A bar chart of counts of microcap IPOs by country of headquarters, 2023-25

McClory said he expected that any Trump ban would probably target large state-owned enterprises and sensitive industries rather than small companies. He dismissed concerns that Chinese IPOs in the US were taking investment dollars that would otherwise benefit US entrepreneurs.

“Virtually all of these Asian IPOs were full of investors from Greater China, or Chinese-American investors in the US and outside of China,” he said. “It’s not like they come to the US and take money from American widows and orphans.”

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Here’s What the New Virginia House Map Looks Like

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Here’s What the New Virginia House Map Looks Like

Virginians approved a new congressional map on Tuesday that would aggressively gerrymander the state in the Democrats’ favor, giving the party as many as four more U.S. House seats.

The new map draws eight safely Democratic districts and two competitive districts that lean Democratic, according to a New York Times analysis of 2024 presidential results. It leaves just one safe Republican seat, compared with the five seats the G.O.P. holds on the current map.

The proposed map was drawn by Democratic state legislators and approved by Gov. Abigail Spanberger, a Democrat. It eliminates three Republican-held seats in part by slicing the densely populated suburbs in Arlington and Fairfax Counties and reallocating their overwhelmingly Democratic voters into five congressional districts, some stretching more than a hundred miles into Republican areas.

Perhaps the most extreme new district is the Seventh, which begins at the Potomac River and stretches to the west and south in a manner that resembles a pair of lobster claws. Several well-known Virginia Democrats have already announced their candidacies and begun campaigning in the district.

Reid J. Epstein contributed reporting.

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Southern Poverty Law Center indicted on federal fraud charges

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Southern Poverty Law Center indicted on federal fraud charges

Acting Attorney General Todd Blanche speaks as FBI Director Kash Patel listens during a news conference at the Justice Department on Tuesday in Washington.

Jacquelyn Martin/AP


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Jacquelyn Martin/AP

WASHINGTON — The Southern Poverty Law Center was indicted Tuesday on federal fraud charges alleging it improperly raised millions of dollars to pay informants to infiltrate the Ku Klux Klan and other extremist groups, acting Attorney General Todd Blanche said.

The Justice Department alleges the civil rights group defrauded donors by using their money to fund the very extremism it claimed to be fighting, with payments of at least $3 million between 2014 and 2023 to people affiliated with the Ku Klux Klan, the United Klans of America, the National Socialist Party of America and other extremist groups.

“The SPLC was not dismantling these groups. It was instead manufacturing the extremism it purports to oppose by paying sources to stoke racial hatred,” Blanche said.

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The civil rights group faces charges including wire fraud, bank fraud and conspiracy to commit money laundering in the case brought by the Justice Department in Alabama, where the organization is based.

The indictment came shortly after SPLC revealed the existence of a criminal investigation into its program to pay informants to infiltrate extremist groups and gather information on their activities. The group said the program was used to monitor threats of violence and the information was often shared with local and federal law enforcement.

SPLC CEO Bryan Fair said the organization “will vigorously defend ourselves, our staff, and our work.”

Blanche said the money was passed from the center through two different bank accounts before being loaded onto prepaid cards to give to the members of the extremist groups, which also included the National Socialist Movement and the Aryan Nations-affiliated Sadistic Souls Motorcycle Club. The group never disclosed to donors details of the informant program, he said.

“They’re required to under the laws associated with a nonprofit to have certain transparency and honesty in what they’re telling donors they’re going to spend money on and what their mission statement is and what they’re raising money doing,” he said.

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The indictment includes details on at least nine unnamed informants were paid by the SPLC through a secret program that prosecutors say began in the 1980s. Within the SPLC, they were known as field sources or “the Fs,” according to the indictment. One informant was paid more than $1 million between 2014 and 2023 while affiliated with the neo-Nazi National Alliance, the indictment said. Another was the Imperial Wizard of the United Klans of America.

The SPLC said the program was kept quiet to protect the safety of informants.

“When we began working with informants, we were living in the shadow of the height of the Civil Rights Movement, which had seen bombings at churches, state-sponsored violence against demonstrators, and the murders of activists that went unanswered by the justice system,” Fair said. “There is no question that what we learned from informants saved lives.”

The center has been targeted by Republicans

The SPLC, which is based in Montgomery, Alabama, was founded in 1971 and used civil litigation to fight white supremacist groups. The nonprofit has become a popular target among Republicans who see it as overly leftist and partisan.

The investigation could add to concerns that Trump’s Republican administration is using the Justice Department to go after conservative opponents and his critics. It follows a number of other investigations into Trump foes that have raised questions about whether the law enforcement agency has been turned into a political weapon.

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The SPLC has faced intense criticism from conservatives, who have accused it of unfairly maligning right-wing organizations as extremist groups because of their viewpoints. The center regularly condemns Trump’s rhetoric and policies around voting rights, immigration and other issues.

The center came under fresh scrutiny after the assassination last year of conservative activist Charlie Kirk brought renewed attention to its characterization of the group that Kirk founded and led. The center included a section on that group, Turning Point USA, in a report titled “The Year in Hate and Extremism 2024” that described the group as “A Case Study of the Hard Right in 2024.”

FBI Director Kash Patel said last year that the agency was severing its relationship with the center, which had long provided law enforcement with research on hate crime and domestic extremism. Patel said the center had been turned into a “partisan smear machine,” and he accused it of defaming “mainstream Americans” with its “hate map” that documents alleged anti-government and hate groups inside the United States.

House Republicans hosted a hearing centered on the SPLC in December, saying it coordinated efforts with President Joe Biden’s Democratic administration “to target Christian and conservative Americans and deprive them of their constitutional rights to free speech and free association.”

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Virginia Gov. Abigail Spanberger Stressed Pragmatism, But Politics Hound Her

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Virginia Gov. Abigail Spanberger Stressed Pragmatism, But Politics Hound Her

On the night of her resounding win in last fall’s election for Virginia governor, Abigail Spanberger told her supporters that they had sent a message to the world. “Virginia,” she said in the opening lines of her victory speech, “chose pragmatism over partisanship.”

But even then it was clear that the first big issue of her term would be as partisan as it gets: a proposed amendment by her fellow Democrats to allow them to gerrymander the state’s 11 congressional districts.

The push to redraw the Virginia map was another salvo in a barrage of redistricting spurred by President Trump in a bid to keep Republicans in control of the House in this year’s midterm elections.

Virginians vote on Tuesday on whether to adopt the proposed map, and if the “Yes” vote wins, Democrats could end up with as many as 10 seats, up from the six they hold now. The redistricting battles of the last year would end up in something of a draw, with gains for Democrats in California and Virginia offsetting gains for Republicans in Texas, Missouri and North Carolina — unless Florida lawmakers decide in the coming weeks to draw a new, more Republican-friendly map.

Historically, redrawing of congressional maps has been done each decade after the U.S. census. But with Republicans holding such a slim majority in the House, Mr. Trump began by pressing Texas to redraw its maps, touching off the wave of gerrymandering

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Virginia Democratic legislators rolled out their redistricting plan last October, setting in motion the state’s lengthy amendment process just as the campaign for governor was entering its final weeks. At the time, Ms. Spanberger expressed support for the plan, though she emphasized that its passage was up to the legislature and then to the voters.

But even if her formal role in the process was relatively minor — Ms. Spanberger signed the bill setting the date for the referendum — the politics of the effort has loomed over the first few months of her term. Her support for the amendment has drawn accusations of hypocrisy from the right and complaints from some on the left that she has not been outspoken enough in her advocacy.

“There’s always going to be somebody who wants me to do something differently,” the governor said in an interview on Saturday at a rally in support of the amendment outside a home in Northern Virginia. “I will always make someone unhappy, and I will always make someone happy.”

Ms. Spanberger, a former C.I.A. officer and three-term congresswoman, won a 15-point victory in 2025 after running on a campaign focused on pocketbook issues. Centrism has been her political brand since she was first elected to the House in 2018, flipping a district that had long leaned to the right.

Now Republicans campaigning against the amendment have made Ms. Spanberger a prime target, deriding her as “Governor Bait-and-Switch” and highlighting an interview in August 2025 in which she said she had “no plans to redistrict Virginia.”

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“This was the perfect opportunity for her to show that she is the middle-of-the-road suburban mom that she portrayed herself as,” said Glen Sturtevant, a Republican state senator. He dismissed the notion that this was an effort that had been thrust upon her, pointing out that she had signed the bill setting the date for the referendum. “She is certainly an active participant in this whole process,” he said.

Republicans have eagerly highlighted recent polls suggesting that Ms. Spanberger’s honeymoon is over, though because governors in Virginia cannot serve two consecutive terms, public approval is less of a pressure point than it might be elsewhere. Some of her political adversaries have tied the drop in her ratings to her involvement in the campaign for the amendment.

But a number of factors are at play in those sagging poll numbers. Some on the right are irked by her support of standard Democratic priorities like gun control measures and limits to cooperation with federal immigration agents.

But some of the most vociferous criticism of her from Republicans, up to and including the president, has been for a host of proposed taxes and tax hikes in the legislature — on everything from dog grooming to dry cleaning — that she in fact had nothing do with. Most of those taxes, which were floated by various lawmakers, never even came up for a vote.

But Ms. Spanberger did not publicly hit back against these attacks until recent days, a delay that some Democrats say was costly.

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“She let other people define her,” said Scott Surovell, the State Senate majority leader.

Mr. Surovell’s frustration echoed a growing discontent among Democrats about the governor’s recent moves. For all the Republican criticism of her, some operatives and lawmakers said, Ms. Spanberger has not been aggressive enough in pushing for Democratic priorities, redistricting among them.

This criticism broke out into the open in recent days, after the governor made scores of amendments to bills that had passed the General Assembly. Some lawmakers and Democratic allies accused her of unexpectedly diluting long-sought goals like expanded public sector unions and a legal retail marketplace for cannabis.

“Our party base is looking for us to stand up and fight and advocate and deliver,” said Mr. Surovell, who represents a solidly Democratic district in Northern Virginia. “It’s hard to deliver when you’re standing in the middle of the road.”

In the interview, Ms. Spanberger insisted that she supported the purpose of many of the bills but had to make amendments to ensure that her administration could implement them.

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And she said she had been explicit in her support of the redistricting effort, appearing in statewide TV ads encouraging people to vote “Yes” even as an anti-amendment campaign has sent out mailers suggesting that the governor opposes the effort.

But she said she had never been in a position to barnstorm the state as Gov. Gavin Newsom did in the months leading up to the redistricting referendum that passed in California. Mr. Newsom is a second-term governor in a much bluer state, she said, while she only recently took office and has been “in the crush of their legislative session,” with hundreds of bills to read and examine in a short period.

“Those who may not be focused on the governing and only on the politics, they’re going to want me to do politics 100 percent of the time,” she said. “And for people who care about the governing and not the politics, they’re going to want me to do governing 100 percent of the time.”

Her preference, as she has often made apparent, is for the governing over the politicking. But she acknowledged that it is all part of the job.

Asked if she lamented that the highest-profile issue of her term so far was such a polarizing matter, rather than the cost-of-living policies she emphasized on the campaign trail, she said: “Any person in elected office wants to talk about the thing they want to talk about all the time, and that’s it. So I won’t say ‘No’ to that question.”

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