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Showing posts from December, 2019

NIO Reports Q3 Results

The NIO ES8. image: NIO Chinese electric car maker NIO just reported its financial results for the third quarter of this year, indicating $257 million in revenue but with a $357 million loss in the period. The company delivered 4,799 vehicles in the third quarter, compared to 3,553 deliveries in the preceding quarter. In reaction to the earnings reports, NIO's shares are up more than 50%, trading for $4.17 apiece as of writing. According to Yahoo Finance , NIO's quarterly results surpassed analyst expectations, with revenue projections for the third quarter having hovered at around $231 million. NIO's $257 million in revenue happens to have beat that by a significant margin, but still amid steep losses. NIO has been losing lots of money as it spends to gain ground as a newer entrant to the electric car market. The company was founded just five years ago and has delivered approximately 30,000 vehicles since inception, a significant number but a much smaller am

ClassPass Reportedly Raising $285 Million In Funding

ClassPass CEO Fritz Lanman (left) and Founder/Executive Chairman Payal Kadakia (right). image: ClassPass According to a Reuters report , fitness subscription startup ClassPass is seeking to raise $285 million in new funding that could push its valuation above $1 billion. Citing a securities filing obtained from analytics firm Lagniappe Labs,  Reuters reports ClassPass will issue 22.7 million 'Series E' shares as part of the funding. A valuation above $1 billion would be a significant boost for ClassPass, which last raised funding at a valuation hovering around $536 million, according to  Prime Unicorn Index . The company's last funding was an $85 million Series D led by Temasek last year, an investment that brought its total funding to north of $200 million. New York-based ClassPass offers monthly subscription plans that provide access to more than 30,000 fitness studios and gyms globally. It's also partnered with large employers like Google, Southwest A

Uber Co-Founder Kalanick Departs Board

Uber co-founder Travis Kalanick. Photograph by Kevin Moloney/Fortune Brainstorm Tech Uber has announced the departure of co-founder Travis Kalanick from its board, effective on the 31st of December. The company's announcement says Kalanick is leaving to "focus on his new business and philanthropic endeavors", the business part likely being CloudKitchens, a shared kitchen space provider he took over after his previous resignation as Uber's CEO. Kalanick's departure happens to come after he unloaded more than 90% of his shares in Uber, which went public just this year. His sell-off began early November up until the past few days. Currently, Kalanick holds about 5.8 million shares, substantially down from the 22.6 million shares he held before the sell-off. Kalanick, who co-founded Uber alongside Garrett Camp, held the position of CEO for a long-time, a position that saw him become the poster-child for the company. However, mounting controversies from

Rivian Raises $1.3 Billion In Additional Funding

The Rivian R1T. image: Rivian Not long after raising $500 million from Ford and an additional $350 million from Cox Automotive, electric car startup Rivian has announced $1.3 billion in new funding led by T. Rowe Price, with participation from BlackRock and existing investors Ford and Amazon. The additional investment is the fourth Rivian has raised this year, and comes a few months after Amazon announced it'll purchase 100,000 vehicles from the company  as part of plans to make its delivery fleet run on renewable energy. The additional investment brings the total raised by Rivian this year to a whooping $2.85 billion. In a statement, Rivian founder and CEO RJ Scaringe praised the investment as demonstrating "confidence in our team, products, technology and strategy". With the investment, Rivian now stands as one of the top-most financed electric car upstarts in what seems like a crowded market. Rivian plans to begin selling vehicles next year, which may ex

Uber Ordered To Cease Colombian Ride-Hailing Operations

Uber CEO Dara Khosrowshahi Photo by Steve Jennings/Getty Images for TechCrunch Uber has been ordered to cease its ride-hailing operations in Colombia by the country's Superintendency of Industry and Commerce, a regulatory agency in charge of regulating business practices. The Superintendency of Industry and Commerce (SIC) cites violated competition rules as the reason for the order. Notably, this is Uber's third regulatory ban in the span of a month, the other two being in London and Germany. The city of London suspended Uber's operating license for the second time just few weeks ago, while a Germany court ban  came just this week. In a statement, Colombia's SIC said Uber amassed “a significant advantage in the market” by offering transport services for individuals via its app, and ordered the company's ride-hailing services “through the use of the Uber application to cease immediately.” Uber on the other hand said in a statement that it doesn't a

F5 To Acquire Shape Security For $1 Billion In Cash

F5 Networks CEO François Locoh-Donou image: F5 Networks F5 Networks has announced it's acquiring Shape Security, a Santa Clara-based fraud detection startup, for around $1 billion in cash. The announcement happens to come just three months after Shape Security raised funding at a $1 billion pre-money valuation. F5's acquisition is expected to be close in the first quarter of next year. Shape Security as a company has raised $183 million in total funding. Its backers include top tier VCs such as Kleiner Perkins, Norwest Ventures Partners, HPE Growth, and Focus Ventures. Shape Security develops fraud detection software adopted by large enterprises to protect their online applications. Banks make up a substantial portion of its customer base, as fraud detection and prevention stands crucial to the online banking process. Altogether, Shape Security claims its fraud detection software detects and blocks up to 2 billion fraudulent or unwanted transactions daily. Shape S

Glovo Nabs $167 Million Series E

Glovo co-founder Sacha Michaud Photo by Noam Galai/Getty Images for TechCrunch Glovo, a popular on-demand delivery service that currently operates in 26 countries, has raised 150 million euros ($167 million) in Series E funding led by Mubadala, the sovereign wealth fund of Abu Dhabi, with participation from existing investors Delivery Hero, Lakestar and Drake Enterprises. The funding values Glovo at more than $1 billion, marking it as the second Spanish startup, the other being Cabify, known to have crossed the valuation milestone. As per Glovo CEO Oscar Pierre, the new funding will be put towards growing the company's headcount, with plans to hire 300 new engineers and developers by mid-next year. Barcelona-based Glovo also wants to make use of the new capital to expand into new markets, as it has consistently done since its founding in 2015. The new funding happens to come less than a year after Glovo's last known funding, which was a $169 million Series D rai

Lime Launches Weekly Subscription Service

image: Lime Lime has announced  the launch of a weekly subscription service for frequent riders of its e-scooters and bikes, first in cities across the U.S., Australia and New Zealand, followed by a roll-out in additional global markets by early January. The new service, dubbed LimePass , offers weekly unlimited scooter unlocks for a flat fee of $5. The idea behind such is to let frequent riders cut down on costs by out-rightly purchasing seven-day unlocks to Lime's shared scooters and bikes for a flat fee, as opposed to paying separately for several rides that would be taken over a week. For context, unlocks for Lime scooters and bikes costs $1 to its customers, who still have to pay per-minute rates to keep riding. One might wonder, and reasonably so, that paying Lime separately for unlocks taken over a week would amount to more revenue for the company than paying a flat free of $5 for unlimited unlocks for a weekly period. However there's quite a catch, being that se

Intel Scoops Up Habana Labs For $2 Billion

Habana Labs co-founder and chairman Avigdor Willenz.  image: Habana Labs Intel has announced  it has acquired Habana Labs, an Israel-based startup that makes AI chips. The semiconductor giant is paying roughly $2 billion for Habana, one year after leading a $75 million Series B investment in the company. The acquisition represents another score for Habana co-founder and chairman Avigdor Willenz, a serial entrepreneur who previously founded and led Galileo Technology ( acquired for $2.7 billion by Marvell Technologies) and Annapurna Labs ( acquired for $350 million by Amazon). Unsurprisingly, both companies were chip makers, crowning Willenz as a whizz in the chip-making sector with sequential successful exits. Prior to this acquisition, Habana had raised $120 million in funding from investors including Intel Capital, Battery Ventures, Bessemer Venture Partners and WRV Capital. As of November last year (when it last raised funding), Tel Aviv-based Habana had just over 120

Zomato Reportedly In Advanced Talks To Acquire Uber Eats India

image: Uber According to a report from TechCrunch , Uber has entered advanced stages of negotiations to sell its Indian food delivery arm, UberEats India, to competitor Zomato as it looks to reduce global spending. TechCrunch reports the negotiations currently values UberEats India at around $400 million, and could involve Uber investing between $150 million to $200 million in Zomato to be finalized. Rumors of Uber looking to offload its Indian food delivery arm are not new, with the company having been reported to have discussed selling UberEats India to another Indian food delivery competitor, Swiggy , early this year. Indian news outlet Times of India first reported about Uber and Zomato's negotiations last month. The negotiations happen to come at a time Zomato is looking to raise up to $600 million in new funding, as made known by its CEO Deepinder Goyal . Uber looking to sell its Indian food delivery arm doesn't sound startling, as the company faces significa

A New Fast & Furious Game Is Launching Next Year

Vin Diesel image: Gage Skidmore on Flickr Japanese game studio Bandai Namco has announced  a new title to be released next year that'll be based on the popular Fast & Furious movie franchise. The new game, dubbed  Fast & Furious Crossroads , is described as a "team-based, vehicular-heist action game", and'll feature Fast & Furious stars Vin Diesel, Michelle Rodriguez and Tyrese Gibson, reprising their movie roles as Dom, Letty, and Roman. Also featured in the game are The Walking Dead 's Sonequa Martin-Green and John Wick:   Chapter 3 's Asia Kate Dillon. Fast & Furious Crossroads , scheduled to launch May next year, will be available on the PS4, Xbox One and PC. Unsurprisingly, the ninth installment of the Fast & Furious movie franchise is scheduled to launch on the same month as the newly announced game. Launching  Fast & Furious Crossroads  the same month as the movie, which conventionally draws huge viewers, would likel

Palantir Secures $111 Million U.S. Army Deal

Peter Thiel, Palantir co-founder and chairman. Photograph by Dan Taylor/Heisenberg Media, on Flickr . Palantir has secured a new contract from the U.S. Army that involves the latter committing to spend $111 million next year on services from the former. The new deal deepens ties between Palantir, a data analytics company co-founded by tech veteran Peter Thiel, and the U.S. Army, coming several months after Palantir secured an earlier contract to deploy a complex battlefield intelligence system for the U.S. Army. As reported by the Washington Post , the value of that contract in its entirety could amount to more than $800 million. Palantir's new contract was first reported by Bloomberg , which said it will represent about 10% of Palantir's revenue next year. According to Bloomberg , the deal is a first step in what could be a four-year running $440 million contract for Palantir. The contract involves Palantir providing software to connect human resources, suppl

Apple Scoops Up U.K. Camera Startup

image: Courtesy of Apple Public filings in the U.K. indicates Apple has acquired Spectral Edge, a U.K.-based camera startup that applies machine learning to improve the quality of images. The filings indicate Apple now controls Spectral Edge, evidenced by the appointment of one of its corporate lawyers, Peter Denwood, as a director at the company while its other advisers and board members were terminated. Apple conventionally doesn't announce acquisitions but is known to purchase startups regularly, evidenced by a recent  statement from CEO Tim Cook that Apple acquires a company every two to three weeks on average. Most of its known acquisitions, usually of small startups, were dug up from regulatory filings similar to that of Spectral Edge, a recent example being Apple's purchase of digital marketing startup DataTiger . How much Apple paid for Spectral Edge could not be determined but for a hint, the U.K.-based startup raised $8.1 million in total funding accordi

CuriosityStream Hits 10.5 Million Paying Subscribers

image: CuriosityStream CuriosityStream, a streaming service founded by former Discovery chairman John Hendricks, has announced it has eclipsed 10.5 million subscribers, the count not including registrants who are under free trial. The announcement happens to come at a time media houses are debuting individual streaming services to better control their content and compete with streaming incumbent Netflix. CuriosityStream happens to have drawn a high number of subscribers while being quite low-key in comparison to other newer streaming services. The streaming service, which focuses on subjects like science and nature, attributes its subscriber growth to bundled partnerships with already established cable distributors, a playbook newer streaming services can draw from. CuriosityStream has established partnerships with cable distributors across several countries, for example Altice USA and Suddenlink in the U.S., Airtel in India, and Multichoice’s DStv across Africa. The partner

Uber Said To Be In Talks To Acquire Foresight

An Uber self-driving car prototype image: Uber According to a report from The Information , Uber is in advanced talks to acquire the team behind Foresight, a San Jose-based startup that develops simulation software for self-driving car prototypes. The report made no mention of the deal terms. Foresight is quite the low-key startup, with its website  containing substantial information on its core product but minuscule information about its team. Even Crunchbase  spots little information about the company, with no mention of any investment or its team. However, Foresight's website mentions its CEO by name of Chang Yuan. A simple search led to a LinkedIn profile  that indicates Yuan formerly worked at the likes of Microsoft, Lenovo, Amazon and Apple. His LinkedIn profile indicates he spent more than two years at Apple before leaving to start Foresight two years ago. An acquisition, or moreover an acqui-hire, after two years doesn't sound far-fetched. Uber pulled a si

TikTok Chief To Meet With U.S. Lawmakers

TikTok chief Alex Zhu Photograph by Stefen Chow/Fortune Brainstorm Tech International As first reported by the Washington Post , TikTok chief Alex Zhu is set to make a trip to Washington to meet with U.S. lawmakers in an effort to tackle concerns of privacy, security and censorship risks emanating from the app's Chinese origins. Such trip would indicate efforts by TikTok to maintain its spike in popularity at a time when U.S.-China relationships are strained and U.S. officials are cautious about Chinese companies gaining foothold in U.S. markets where domestic companies have long dominated. Such a trip could also see TikTok's head Zhu, who is based out of Shanghai, face some of the app's biggest critics, in the form of U.S. lawmakers. The Washington Post reports Zhu has sought a meeting with senators Marco Rubio, Tom Cotton, and Josh Hawley, each of whom have questioned TikTok's independence from Chinese influence. Zhu is also said to be planning to meet w

Chime Raises $500 Million At A $5.8 Billion Valuation

Chime co-founder and CEO Chris Britt Photo by Kimberly White/Getty Images for TechCrunch As first reported by CNBC , Chime, a San Francisco-based digital bank, has raised $500 million in Series E funding that values it at $5.8 billion, a significant increase from a $1.5 billion valuation when it raised funding just nine months ago. DST Global, which led the previous round that valued Chime at $1.5 billion, is said to have led the $500 million Series E. According to CNBC, Chime CEO Chris Britt plans on putting the new capital towards developments of new products and doubling the company's workforce by the end of next year. $500 million in a single round marks the biggest single equity investment known so far for a digital bank, surpassing a previous record set by Nubank when it raised $400 million in July. This round included, Chime's total funding since inception now stands at $809 million, according to Crunchbase data . A near quadruple in valuation in the

JFrog Said To Haved Hired Banks For An IPO

(Beginning from left) JFrog Founders Shlomi Ben Haim, Fred Simon, and Yoav Landman image: JFrog According to a  Bloomberg report , JFrog, a San Francisco-based company that makes software for software developers, has hired JPMorgan Chase and Morgan Stanley to lead an initial public offering that's aimed for next year. Bloomberg reports JFrog could seek a valuation of $2 billion or more for its listing, compared to a $1 billion+ valuation when it raised funding last year. Founded in 2008, JFrog makes software used by software developers to deploy and manage software. The company's flagship product is known as "Artifactory", being a repository manager that supports several software package formats. JFrog also offers security, distribution, and pipelining software for developers. The company has attracted more than 4,500 customers so far, including top tech companies like Google, Facebook, Amazon, and Netflix. According to Crunchbase data , JFrog has raise

Sequoia Leads $65 Million Series C For Gong

Douglas Leone, Sequoia Capital's managing partner. Photo by Steve Jennings/Getty Images for TechCrunch Gong, a San Francisco-based "revenue intelligence" startup, has announced $65 million in Series C funding led by Sequoia Capital, with participation from Battery Ventures, Cisco Investments, Norwest Venture Partners, NextWorld Capital, Wing Venture Capital, and cyber-security veteran Shlomo Kramer. All aforementioned investors excluding Sequoia were already previous investors in Gong. The funding brings the total raised by Gong to $134 million. The San Francisco-based company says it'll use the capital to invest in its product, engineering, and go-to-market teams. Under the terms of the funding, Sequoia partner Carl Eschenbach, who previously served as President and COO of VMWare for more than a decade, will join Gong's board. This marks an addition to other board seats he holds at top tech companies like Workday, Zoom, Snowflake Computing and Palo A

Lucid Motors Flags Off Construction Of Arizona Factory

A rendering of Lucid's Arizona factory image: Lucid Motors Lucid Motors, an electric car startup that secured a $1 billion investment from Saudi Arabia's Public Investment Fund last year, has officially flagged off construction of a $700 million factory in the state of Arizona. The factory, chosen after a search spanning 13 U.S. states and more than 60 sites, is where Lucid intends to produce its first car, the Lucid Air . The first phase of the construction will cost Lucid more than $300 million, an investment that's expected to get it ready to begin producing the Lucid Air. The aforementioned $700 million figure is what Lucid expects to put towards full completion of the factory. Lucid held an official event to celebrate the start of construction of its electric vehicle facility. Attendees at the event included executives of the company and Arizona Governor Doug Ducey, alongside officials of the state. Lucid says the factory is expected to create 4,800 dir

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Alert: Nikola Founder Trevor Milton Indicted On Fraud Charges

The founder of embattled electric car startup Nikola Corp. has been formally indicted on fraud charges by the US Justice Department months after resigning from the company. Trevor Milton by name, he's been accused of securities and wire fraud in connection with a scheme to defraud and mislead investors. Milton is accused of misleading investors by making false statements regarding Nikola's products and capabilities. Notably, most of the investors allegedly misled were on the retail side. The DOJ alleges that Milton made false claims regarding "nearly all aspects" of Nikola's business. Milton founded Nikola in 2014 and led it through a public listing via a merger with a special-purpose acquisition company (SPAC) last year. The DOJ threw an apparent jab at SPACs in his indictment, asserting that he made 'many' of his false and misleading claims  during a period where he would not have been allowed to do so under rules that govern traditional IPOs were he

Earnings: AMD Doubles Revenue, Triples Profit

In this earnings season, companies all over are dropping their latest quarterly results and we're here equally reporting on them. We've touched on social media companies Snap Inc and Twitter , electric carmaker Tesla , and iPhone maker Apple . Now, the next is chipmaker AMD Inc . AMD has dropped its earnings for the second quarter of 2021, showing strong prospects as revenue doubled year-over-year and net income more than tripled.   Details AMD posted $3.9bn in revenue in Q2, up 99% year-over-year and 12% from the preceding quarter. For the same period, the company's net income was $710mn , up 352% year-over-year and 28% from the preceding quarter. Doubling its revenue and nearly quadrupling net income indicates AMD has a strong yet fast-growing business. It's bound to grow even more as the company is set to complete its acquisition of rival chipmaker Xilinx . AMD makes money selling high-performance chipsets used in computers, consoles, data centers, and the likes

Antitrust: Amazon Fined $900M By EU For Privacy Violations

Tech behemoth Amazon is for the nth time in the crosshairs of the European Union (EU). The latest saga in that arena is that Amazon has been fined a record-breaking amount for alleged privacy violations, according to an SEC filing from the company. Amazon has been fined the sum of €746 million ($888mn) by the Luxembourg National Commission for Data Protection (CNPD) for not complying with data privacy laws. It's the largest fine imposed under Europe's data protection law.  The fine originates from the CNPD accusing Amazon of processing customers' personal data in violation of the EU's famous-cum-infamous General Data Protection Regulation (GDPR) laws.  In June, it was reported ( WSJ )  that the Luxembourg data protection agency had sanctioned Amazon's privacy practices and proposed a fine topping $425mn to the EU's other two-dozen or so national data protection authorities. Now, it appears that the final fine is much larger than that.  Before now, the bigges

Deal: Qualtrics Buys CX Startup Clarabridge For $1.1B

Months after getting spun out of SAP into a separate public company, Qualtrics , a major provider of online survey software, has made a major acquisition. It's agreed to buy Clarabridge , a startup that does similar work to Qualtrics in the field fondly referred to as "customer experience (CX)". Qualtrics will pay $1.1bn all with shares to buy Clarabridge. The acquisition is a major strategic play for the company, pairing Qualtrics' customer survey business with Clarabridge's similar business of measuring customer sentiment from various sources like social media posts and customer support calls. Basically, Qualtrics is in the business of weighing customer surveys directly and Clarabridge in the business of doing so indirectly . Pairing both businesses represents a major strategic play for Qualtrics. In an investor presentation, Qualtrics said that Clarabridge has $100mn in annual revenue, implying an 11x multiple that it's paying to buy the company. That&#

Deal: Amgen Buys Biotech Startup Teneobio In $2.5B Deal

It appears that this Covid era has led to a boom for companies that work on  antibodies , which are protective proteins produced by the human immune system to tackle foreign substances, usually viruses. Antibodies are very useful in the research and treatment of viruses such as Covid. There are companies that specialize in antibodies and one of them, BioLegend , was recently bought for a whopping $5.3bn . Now, another such company, Teneobio , is getting bought for a big amount. Teneobio has agreed to be acquired by Amgen , an American biotech giant. Amgen is paying $900mn upfront for the company, then an additional $1.6bn in cash contingent on the company hitting certain milestones. It sums up to a $2.5bn deal . Teneobio is a clinical-stage biotech startup working on antibodies aimed at treating cancer, autoimmunity, and other infectious diseases. As it's still in the clinical trial stage with no viable product yet, it appears that Amgen is betting big on Teneobio's trials b

Antitrust: UK Probes Facebook's $1B Kustomer Acquisition

The UK's antitrust agency has launched a probe into Facebook's latest acquisition, that of chatbot platform Kustomer Inc , which Facebook agreed to buy last November for a reported $1bn. The UK's Competition and Markets Authority (CMA) on Friday, the 30th of July, released a statement  indicating it had opened an inquiry into Facebook's purchase of Kustomer, regarding if it'll result in "a substantial lessening of competition" within the market Kustomer operates in. Such probes aren't out of the norm and are routine for big acquisitions. For Facebook, it speaks to the fact that antitrust agencies are watching the company's moves, especially regarding acquisitions. To note, two of Facebook Inc's biggest products outside the main Facebook platform, Instagram and WhatsApp , were acquisitions. In fact, it's primarily acquisitions that have propelled the company's growth. As with such probes, the UK will first seek comments from the public

Hollywood: Reese Witherspoon's Media Co. Sold In $900M Deal

A media company founded by superstar actress Reese Witherspoon has sold for a large amount to a company still in its infancy that hasn't even been named yet. That company is Hello Sunshine , a media company that produces content distributed across various platforms; movies, TV shows, podcasts, et al. Hello Sunshine has been sold to a newly-formed media venture t hat's backed by investment capital from Blackstone , the private equity giant.  The venture is led by ex Disney honchos Kevin Mayer and Tom Staggs .  As it is, the Blackstone-funded venture is acquiring a majority stake in Hello Sunshine from a group of external investors while anchor shareholders like Witherspoon and her founding partners will roll over and retain their equity stakes in the newly-formed venture. Officially, the deal's financial terms weren't disclosed, but a report from The Wall Street Journal says it's a $900mn deal. According to the report, the Blackstone-funded venture will pay $500mn

Earnings: Shopify Beats Estimates, Reaches Major Milestone

In this season of earnings results and we at The Techee  reporting on them, we're here with a beat on Shopify , which has released its earnings statement for the second quarter (April-June) of this year. In Q2, Shopify beat revenue expectations from analysts and as well achieved a major financial milestone by crossing $1bn in quarterly revenue for the first time. Shopify had $1.1bn in revenue in the quarter, up 57% year-over-year. Net income for the same period was $897mn , most of which was due to a $778mn gain in equity investments, likely from Shopify's stake in Affirm , a major 'buy now, pay later' lender. As usual, most of Shopify's sales ( $785mn ) came from "Merchant Solutions", which groups additional services the company offers atop recurring subscriptions charged to online retailers. Sales from subscriptions came at $334mn in the quarter. Gross Merchandise Volume (GMV), representing the total worth of transactions made on the Shopify platform,

Alert: Square Buys Australia's Afterpay For $29B

It's a big day in the fintech world. There's been a major acquisition with a major American fintech company, Square , buying Australia's foremost fintech startup, Afterpay , a 'buy now, pay later' lender. Square has reached an agreement to buy Afterpay for a whopping $29bn , marking one of Australia's biggest buyouts. It's a big deal that a startup founded barely seven years ago is selling for $29bn.  Square will pay the $29bn all with shares. It means that shares of Afterpay, which are traded on the Australian Securities Exchange, will be exchanged for Square stock traded on the New York Stock Exchange (NYSE). Afterpay is Australia's foremost 'buy now, pay later (BNPL)' lender in online retail. For the uninitiated, the 'buy now, pay later' business is a relatively young one providing alternatives to credit cards for consumers to shop online. It provides loans for consumers to shop online and then pay back in installments. Usually, credi

Markets: US SEC Takes Aim At Chinese IPOs

The US Securities and Exchange Commission (SEC) has taken a swipe at Chinese initial public offerings (IPOs) after regulatory hiccups in China have affected many Chinese stocks listed on US markets and American stockholders holding them. The SEC has issued new guidance on Chinese companies seeking to list shares in the US, requiring them to make certain disclosures to investors or otherwise refrain from listing in the US markets. First of all, usually, Chinese companies listing in the US don't actually sell shares of the operating companies but that of shell companies with contractual relationships with the operating companies. These shell shares, known as American Depositary Receipts (ADRs) , are used to circumvent restrictions on foreign ownership of Chinese shares imposed by the country's government. Now, the SEC in a statement has made it clear that Chinese companies seeking to list in the US must provide clear descriptions of the shell operations involved in such listing