3 Red Flags for NetEase's Future

In early May, the U.S. Securities and Exchange Commission (SEC) added NetEase to a growing list of Chinese stocks that could be delisted in three years if they don't fully open their books to U.S. regulators. NetEase launched a secondary initial public offering (IPO) in Hong Kong to address those risks, and U.S. investors could potentially swap their shares for Hong Kong-listed shares if they're ever delisted from the Nasdaq. In China, new video games must be approved by the government and granted licenses before they're released.