Reverse merger means (mostly known for a Chinese company) to become public by merging with a skeleton public stock. Sure they look compelling, lower valuation than their IPO counter part (e.g. BIDU, SINA, etc). Most of them went parabolic and frothy at one time or another, but most of them eventually saw demise. These companies came in from the “back door” instead of the bona fide IPO for a reason. And any of these reason cannot be good.
Some of them have been suspended because of fraudulent accounting reports. For example, CCME and CAGC since March 11.
Some of them are under scrutiny as they attempted sellout deals. For example, CAAS, FSIN, and HRBN.
As I was brought to awareness of this yesterday and found that I do own one, YONG, I wanted to look for opportunity to get rid of it. But, a day too late. It had earning last night and today it got slaughtered just like the rest of the reverse-merged stocks.
There are too many stocks to trade and/or invest. These reverse-merged Chinese stocks are time bombs. Avoid them like plague.