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Why MOMO Stock Is Falling Today

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Momo Inc (ADR) ( MOMO ) stock was down following news of investigations in China.

China regulators have announced that they will be investigating efforts from U.S.-listed companies in China to go private before relisting on its domestic market. Momo is one of the companies that could be affected by this .

The idea is that the companies go private in the U.S. and then relist themselves on the Chinese stock market via an IPO, merger or shell company. This can result in the company being listed overseas for much higher than it was stateside. MOMO stock, and several others planning to take advantage of the relisting backdoor, saw their shares drop after this news.

A group of investors, including Alibaba Group Holding Ltd ( BABA ), are behind efforts to take Momo private before relaunching it in China. It's possible that Alibaba's influence could help the social media company grow further in China.

MOMO stock was down 6% as of Noon Friday.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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