What happened: The biggest Chinese technology firms are lobbying the Hong Kong Stock Exchange to change its rules, to their advantage. Citing two people familiar with the matter, the report points to Mayoan Entertainment—owned by Meituan’s Wang Xing—as one example. Before its IPO on Feb. 4, it threatened to leave Hong Kong, unless Tencent, its lead investor, was allowed to buy shares in the public offering. This tactic, known as double-dipping, inflates share value, attracting more investors. Chinese tech companies are also seeking waivers for super-voting stock.
Why it’s important: Hong Kong is in a tough competition for new IPOs with the world’s biggest stock markets. In 2014, it lost the world’s most valuable IPO, Alibaba, to New York, because of its voting rights rules. A large proportion of listed companies are Chinese, many of which are subsidiaries of tech titans, and is thus wary of how it would fare in their absence. Its rules were tailored to its traders: HKSE has more retail traders than other big stock exchanges. Now, these regulations are pulling them out of the good graces of some of the world’s biggest investors. Almost one year ago, it amended its rules to allow dual-class shareholders in a bid to attract more tech capital.