Tech Private Placements Face Price Inversion of Over 28%, Public Funds Book Losses
In June 2026, several technology companies including Jiangbolong, Luwei Optoelectronics and Siquan New Materials completed private placements, with multiple public fund institutions participating. A sharp tech-sector pullback in July pushed secondary market prices below placement prices for some stocks, creating price inversions exceeding 28% in certain cases and leaving participating public funds with floating losses. The competitive bidding process, which favors higher bids during rising markets, left placements without a safety cushion when sentiment shifted.
In June 2026, several technology companies including Jiangbolong, Luwei Optoelectronics and Siquan New Materials launched private placements, with multiple public fund institutions participating and receiving allocations. In July, the technology sector experienced a sharp pullback, pushing the placement prices of some stocks above their secondary market prices and creating price inversions, with certain stocks seeing inversions exceeding 28% and participating public fund institutions suffering floating losses.
The placements used a competitive bidding process, in which the price-priority principle tends to encourage participants to bid higher prices during rising market cycles to secure allocations, thereby pushing up issuance prices. When market direction shifts, placement prices lacking a safety cushion are more vulnerable to impact. The recent market style rotation has been extreme, making the execution of placement strategies increasingly difficult. Industry institutions said investors should shift from track-based logic to fundamental-based logic, and emphasize position diversification and trading rules.