About 2 months ago, I left the dreary mindset of Wall Street (remember, this was 2 months ago!) and headed to Shanghai for the International PIPEs Conference. I had not been to China since September 2008, which is unusual for me since I usually visit China every quarter,and was curious to experience what the mindset of the Chinese business owner would be given the fact the U.S. and world economy were in a tail spin.
Although reports from China were more positive than the rest of the world, the numbers in China were still down. Upon arriving at the conference hotel lobby on a Sunday night, I was surprised to see so many familiar faces. Although these people were not the Chinese business owners whose mindset I was looking to tap into, it gave me the initial positive feedback I was looking for in China.
After waking up in the middle of the night (which is usual for me the first night I arrive in China based on the time difference; however, this night I didn’t have to think about a work project since the University of Wisconsin’s men’s basketball team was playing Xavier in an NCAA tournament game and I was able to watch a live scoreboard of the game on my Blackberry – my son attends the University of Wisconsin so I have become an avid Badger fan and follow their sports teams!) and getting an early start to the conference the next morning, I became pleasantly surprised as the conference filled with not just the “usual suspects” but an overabundance of Chinese business owners and entrepreneurs.
After speaking with several Chinese business owners and entrepreneurs at the conference, my attitude toward future business in China became as positive as ever. It seems that several people I spoke to were still very interested in the “going public” process in the US. Though they understood that financings were “few and far between” at the moment, they did not necessarily need the financing in the immediate future. In addition, they felt that if they could go public in the next 6 -12 months, that PIPE financings would return, albeit not in the same form or terms as in the past. Basically, they still wanted to access the best financial markets in the world.
Fast forward to the China Rising Conference in NYC on May 18. We were initially reluctant to sponsor the conference but finally agreed (Crocker Coulson clearly has excellent powers of persuasion!). Our reluctance was based on the fact we did not know what type of attendance to expect. Once again, we were pleasantly surprised. The attendance was excellent. Although there were several executives from US based funds in attendance that previously were consistent and significant players in the Chinese PIPE market and were reluctant to undertake future investments into this market, the general attitude of most people at the conference was that China is still a “hot” area and is here to stay for the immediate future.
Our practice entails domestic transactions as well as Chinese based operating company transactions (Reverse Mergers, PIPEs, Self- Filings). However, for us, the Chinese transactions have been more active than the domestic transactions over the last 9 months. Based on what I have experienced and learned at the 2 recent China focused conferences, my gut feeling is the Chinese market for going public in the US will remain very, very active for the immediate future and beyond. We are presently working on a few China transactions and the format has changed from the traditional APO. I believe this trend will continue.
So, in summary, as I stare out my window and look out at a cold, dreary late May day in the Northeast, I feel comforted by the fact that just as the weather be heating up in the near future, the Chinese market for going public will continue to remain hot.
Richard I. Anslow, Esq.
Managing Partner
Anslow + Jaclin LLP
195 Route 9 South | Manalapan, NJ 07726
T 732 409 1212 | F 732 577 1188
ranslow@anslowlaw.com | www.anslowlaw.com