Hong Kong – When Mr Au Yat-Gai was price US$33 billion (S$42 billion) on paper, he was not in his Hong Kong workplace.
One week later, when his web price plunged to US$10.1 billion, he was not round both.
Shares of Regencell Bioscience Holdings, the Nasdaq-listed firm he based, have plunged to US$20.19 as at June 27 from a excessive of US$78 on June 17.
Officers on the headquarters of Regencell stated each instances that Mr Au makes solely brief visits there, earlier than turning away reporters.
The standard Chinese language medication (TCM) firm, integrated within the Cayman Islands, occupies the entire ninth flooring of a tower in Hong Kong’s bustling Causeway Bay, together with a reception space with a big desk tennis desk.
Little is identified concerning the tiny, money-losing firm whose shares exploded 82,000 per cent higher and all of the sudden made Mr Au, its chief government officer with an 86 per cent stake, richer on paper than a number of the metropolis’s tycoons like Mr Li Ka-shing.
The fleeting nature of its rip-roaring rally has captivated and mystified observers, from these within the US to Hong Kong.
Morning Brew, a well-liked enterprise account on social media platform X, flagged its inventory transfer and puzzled: “Is there one thing I’m lacking?”
Regulators within the US, which carefully monitor wild swings in inventory costs, would possibly quickly be asking the identical query, in keeping with specialists.
The Monetary Trade Regulatory Authority (Finra), the watchdog for broker-dealers, has repeatedly warned that small, low-cost shares are extra vulnerable to fraud. These firms will be targets for pump-and-dump schemes wherein fraudsters inflate the inventory value and shortly promote their shares.
The US Securities and Alternate Fee (SEC), in the meantime, has been more and more cautious about firms listed on US exchanges which can be primarily based abroad – and Regencell checks each packing containers.
The regulator on June 4 known as on the general public to weigh in on whether or not the company wanted to amend the definition of what’s known as a overseas non-public issuer, doubtlessly limiting the variety of firms that qualify for particular standing that lets them keep away from submitting quarterly monetary stories or disclosing when executives purchase or promote firm shares.
“That is an instance of very uncommon actions in share costs,” stated Mr Richard Harris, founder and CEO of Port Shelter Funding Administration in Hong Kong. “These actions might actually set off curiosity by investigators.”
The SEC and Finra declined to touch upon whether or not they had been monitoring Regencell’s strikes.
Regencell didn’t reply to e-mails and cellphone requires touch upon its inventory efficiency and its founder’s fortune.
Based in 2014, Regencell’s important line of enterprise is advertising and marketing and licensing conventional remedies for consideration deficit hyperactivity dysfunction (ADHD) and autism spectrum dysfunction (ASD) developed by the founder’s father, Mr Au Sik-Kee. It has unique rights over his conventional medicinal formulation, trademarked below the identify Mind Idea.
The agency posted web losses of US$4.4 million and US$6.1 million respectively for the fiscal years ended June 2024 and 2023, in keeping with filings. Its chief medical officer place has been vacant because the final physician to carry the job resigned in 2022.
The youthful Mr Au attended the Haas College of Enterprise on the College of California, Berkeley, and labored at Deutsche Financial institution within the late Nineties. He suffered from studying issues and speech issues, and had poor grades and an uncontrollable mood, in keeping with a video publish on the corporate’s Instagram account.
Regencell’s mission is to “enhance and save lives utilizing a pure and holistic TCM method to deal with ADHD and ASD”, in keeping with the identical video.
The corporate’s official Instagram account has greater than half one million followers. BeOne Medicines, the most important healthcare agency listed in Hong Kong, has simply over 2,500. Regencell constructed up a following with the assistance of social media campaigns on the platform that supplied free tickets for Taylor Swift concert events within the US and Asia.
The agency’s second-largest shareholder is Digital Cell Enterprise, a agency in the end owned by Taiwan’s Mr Samuel Chen and his spouse Fiona Chang. Mr Chen was an investor whose early investments in Zoom Video Communications made him a fortune when the corporate’s inventory soared nearly 1,500 per cent through the Covid-19 pandemic.
Mr Chen, Ms Chang and their kids personal a 55 per cent stake in Taipei-based Polaris Group, a biotechnology firm growing anti-cancer medicine. He’s additionally the largest shareholder of Sonix Expertise, a supplier of built-in circuits listed in Taipei.
On June 18, two males and a lady arrived at Regencell’s Hong Kong workplace in search of details about therapy for ADHD and dementia. They stated they learn concerning the inventory’s surge earlier than arriving. The guests had been additionally turned away. An worker stated its workers weren’t medical doctors, and directed them to the corporate’s web site.
“Early-stage pharma firms can soar from a greenback to 4 {dollars} in 90 seconds if there’s some information about one in every of their medicine below growth doing effectively in a scientific trial,” stated Professor Erik Gordon of the College of Michigan’s Ross College of Enterprise. On this case, “what’s fascinating is there’s no information”. BLOOMBERG
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