Thursday, October 3, 2013

Montage's IPO

It was good to see Montage's IPO last week on NASDAQ has done reasonably well after a less than stellar start (the firm's target price was lowered right before the IPO).  The price is now back at the upper end of the original target range and this represents a price premium compared to a firm like Actions.   Montage's stock performance (admittedly just one week) is well deserved given the firm's technical team and track record.  More importantly, it might be part of a turn around in the attitude of US equity markets towards Chinese stocks.  While many firms deserved their bad reputations and the scorn short-sellers heaped upon them, the good firms have suffered along with the bad.  China-based tech firms need to be treated with circumspection, but cannot all just be labelled as frauds waiting to happen.  Of course, it would be help if PCAOB would assure foreign investors and regulatory agencies that they could actually have access to the documents needed to properly vet Chinese tech firms.