HAO - Haoxi Health Tech Returns To Capital Markets Six Months After IPO | Benzinga
Key Takeaways
- Haoxi Health Tech’s shares tanked by 28% after it announced plans to raise additional funds just a half year after its Nasdaq listing
- The provider of digital advertising services for healthcare companies has expanded quickly since its 2018 launch, with both strong top- and bottom-line growth
By Edith Terry
Haoxi Health Technology Ltd. (NASDAQ: HAO) rode a post-Covid boom in China’s healthcare sector to become one of six Chinese firms to list in the U.S. in January. It was typical of the roughly 20 Chinese and Hong Kong companies to list in New York so far this year, which have quietly raised a collective $195 million. Unlike blockbuster Chinese IPOs of the past, the latest listings have all been relatively pint-sized, including Haoxi’s at just $11 million.
Investors lapped up Haoxi’s story of feeding on demand for marketing services from China’s vibrant healthcare industry, at least initially. After debuting strongly, the stock traded well above its IPO price of $4 in its first four months, valuing the company at more than $200 million at its height. But a May 5 announcement of a rebate plan to advertisers brought an abrupt end to the honeymoon, touching off a downward trend.
Those concerns accelerated after the company announced plans last week to sell an additional 1.5 million shares, as well as warrants with an exercise price of $6.26 per share – the price stock at the time of the announcement. That would raise as much as $9 million, slightly less than the amount it raised in its IPO. Investors dumped the stock after that, wiping another 28% off the company’s value in the next four trading days.
Even after the selloff, the stock’s Tuesday close of $4.60 means the shares are still above the IPO price of $4. But it could be just a matter of time before they fall below that level if the stock keeps falling from its all-time ...