This post is also available in: Español
Huobi Follows in Galaxy Digital’s Footsteps
Backdoor listing is a method by which a private company can get indirectly listed on a stock exchange through the substantial ownership of a listed company. Huobi, a Hong Kong-based cryptocurrency exchange platform, intends to utilize this method to get publicly listed on the Hong Kong Stock Exchange.
Earlier this year, Mike Novogratz engineered the public listing of Galaxy Digital (a cryptocurrency institutional bank) through a backdoor listing. He acquired a majority stake in Bradmer Pharmaceuticals Inc., a publicly-traded company, to get Galaxy Digital listed on the Toronto Stock Exchange.
Huobi Teams Up with Fission Capital to Complete the Process
In September of this year, Huobi and Fission Capital acquired 71.67% of Pantronics Holdings Ltd. in a deal worth approximately USD 77 million, according to a press release. Pantronics Holdings Ltd. manufactures electronics and is listed on the Hong Kong Stock Exchange.
Although Li Lin (Huobi’s founder) solely owns Huobi Capital, Huobi Universals is held about 88% by three significant firms – Techwealt, Sequioa Capital, and Zhen Partners Funds – among which Techwealth is the largest shareholder. Techwealth holds 58.44% of the shares. Interestingly, 89.09% of Techwealth’s stakes, on the other hand, are owned by Li Lin.
According to Sandy Peng, a partner at Fission Capital, Huobi wants to use the acquisition of this entity to enter into new blockchain-related businesses. Although Peng had refuted any likelihood of a reverse IPO, such a scenario is not unlikely. Reverse IPO is a process by which privately held firms can circumvent the lengthy process of getting listed on a stock exchange through direct acquisition of a publicly-held entity.
Huobi is the world’s fourth-largest crypto exchange and could quickly rise in status to the top cryptocurrency exchange following its listing. It would raise Huobi above both Binance and OKEx, who are in first and second positions respectively.