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Since the beginning of this year, many listed companies have seen their share prices drop below IPO prices. As the main indices keep falling, the downward trend is getting worse.
In January this year, the share prices of 10 listed companies fell below their offering prices. The situation worsened from April to June. Affected companies come from different sectors, ranging from power generation, aviation and retail. Even Fortune 500 companies weren't immune. Here's what one analyst has to say.
Yin Guohong, Director of Research Division, Dongxing Securities said "Currently, share prices fall below IPO prices when the P/E ratio is at a high level, over 50 times. As overall market sentiment is falling down and stock indices slump, the share price is likely to fall below the offering price. I think the main reason for the trend is the overvaluing of offering prices."