Apparently there is a new wave of Chinese stocks hitting US exchanges. Some of them are Web 2.0 related. Needless to say, I am extremely skeptical about these Chinese stocks. Historically, there has been an extreme level of blatant fraud from China. This is mainly because these Chinese stocks were listed on foreign exchanges around the world and because scumbags gravitate towards reverse mergers. (To be fair, these China 2.0 stocks are not reverse mergers.) The underwriting of these China 2.0 stocks seem rather loose. They do not have to comply with all parts of Sarbanes-Oxley thanks to the JOBS act. At least 3 of these companies (GOMO, WBAI, WUBA) have identified material weaknesses in their internal controls.
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