With all the bubbling frenzy recently around GameStop Corp., it’s time to step back and look at how the broader market is doing. It turns out, there’s froth elsewhere, too. Look no further than the Chinese companies listed in the U.S.
Of the 100 largest China-based firms by market cap, the mid-tier has already rallied a whopping 43% this year, far outpacing the top and bottom third, data compiled by Smartkarma’s Douglas Kim shows. The biggest winners tend to be thematic. For instance, Futu Holdings Ltd., an e-brokerage that enables Chinese citizens to trade U.S. stocks, soared over 150% to a $15.8 billion market cap, as investors bet the notorious day traders in the People’s Republic would join the retail rebellion too. Daqo New Energy Corp., a solar panel maker, more than doubled in price to an $8 billion market value.
One reason for this outperformance could be the rise of the "Reddit army,” noted Kim. Retail investors are not powerful enough to move the needle on mega-caps such as Alibaba Group Holding Ltd., but they may just be the price setters in a smaller arena.