Trading in Soon to Be Delisted Firm Surges After Fake Text Message Claims It's An IPO

The insanity that is China's A-share retail market continues:

Earlier this month: Dan Dong Xin Tai Electric becomes first to be delisted over IPO fraud in China
China's securities regulator said on Friday it will force Dan Dong Xin Tai Electric Co Ltd to delist for initial public offering (IPO) fraud, the first company to be removed from the Chinese stock market due to issues over IPO disclosure.

In a move to clean up the market, the China Securities Regulatory Commission (CSRC) has fined and reprimanded 17 current and former officials in Xin Tai Electric for forging financial data for their IPO in 2014, CSRC said in a statement on Friday.
This leads to: The first delisting for IPO fraud triggers curious trading fallout
According to information circulating on social media, mass text messages sent under the name Shenwan Hongyuan Securities Co Ltd went out investors, urging them to subscribe for IPO shares under the stock code 300372 — which actually is the code of Xintai.

The ruse played on the investor mania for new shares, which usually generate huge initial profits as investors in the secondary market seek to pick up more shares than they were allowed in the primary offering.

Shenwan Hongyuan later issued a statement saying its name had been falsely used, and the brokerage never sent such a message. Even Xintai, in a filing with the exchange, disavowed the hoax.

The Shenzhen Stock Exchange issued a warning to the company and brokerages about exposing investors to potential risks. All the clarifications seem to have little effect. In the days that followed, nearly 90 million yuan of Xintai shares traded hands.

“I have no clue why there are still people buying the company’s shares because the delisting of Xintai is already a done deal,” said Qian Qimin, an analyst at Shenwan Hongyuan. “Whoever is buying them is taking a huge risk.”
A number of theories tried to explain away the stupidity, but in the end, Occam's razor wins:
Tu said the more likely explanation is that some investors simply aren’t paying enough attention to what’s going on in the market and see the declining price of Xintai shares as a buying opportunity.

Sina: 谁在博傻永久退市的*欣泰:2994名散户前赴后继

The post The Problem With China's Stock Market: Retail Investors has links to a few other idiotic trading surges in the past couple of months.

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