As a Chinese myself, it is understood that official communication from the State is done through insinuations and the recent actions of the CCP hammering on US-listed Chinese companies is unambiguous. Since the chance of opening their books to US regulators is unlikely, the likely outcome is to re-list in Hong Kong or elsewhere.

Of course, a second option is still possible – US regulators bending the knee and allowing the “China Special” to continue. It’s messy and the delisted company is likely to make an offer on their outstanding shares, take it private and relist elsewhere. Doesn’t sound too bad right? Wait, here’s the kicker – since most of the shares (US-listed CN co) are American Depository Receipts (ADRs) and ADR holders are not direct shareholders of the issuer, investors generally do not have the right to vote the shares underlying their ADRs which means investors will have no say if the company were to lowball their tender offer.

Fortunately, we are at the early stages and it will take another year for the potential scenarios to play out. That said, re-evaluate your positions and your exposures. Take into serious consideration the risks of delisting and default back to Warren Buffet’s Rule No. 1 “Never Lose Money”.