Economy of New York City

Two firms reject concerns over Nasdaq dotcom holdings

PUBLISHED : Tuesday, 19 June, 2001, 12:00am
UPDATED : Tuesday, 19 June, 2001, 12:00am

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SAR-listed companies China Strategic and Fortune Tele.com have dismissed concerns that they might need to make a provision for the possible delisting of their investments in the Nasdaq firm PacificNet.com from the United States market.


Speaking after yesterday's shareholders meeting, Richard Lui Siu-tsuen, a China Strategic director, rejected the concerns and said its 30.41 per cent-owned e-commerce solution provider could sort out the problem.


Similarly, Fortune Tele.com's financial controller Alik Yong said it was not necessary for the company to make a provision for the value of its 9 per cent PacificNet stake even if a delisting did happen.


'Because we still can use other measures, like asset value, instead of the market value to book the investment,' Mr Yong said.


The concerns came after PacificNet received, earlier this month, a Nasdaq notice for failing to meet the required US$5 million market value for a public float.


The non-compliance was due to a plummet in PacificNet's share price in the past year.


Since the global technology bubble burst in March last year, the share price has plunged more than 90 per cent from a high of about US$25 to the present US$2 level.


According to Mr Lui, China Strategic invested about US$3 million for its PacificNet stake in 1999.


Analysts said the shares now were worth a market value of only about US$1 million.


The price plunge also hit Fortune Tele.com, making losses of HK$16.48 million and HK$16.89 million, respectively, on its PacificNet holding in the two quarters to December 31.


Fortune Tele.com, a mobile phone distributor listed on the Growth Enterprise Market, once made a paper gain of HK$39.4 million on its investment in the quarter which ended in June last year.