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.
A post on a social media site of the Chinese gaming group disparaged “the bear” — who President Xi Jinping resembles, according to critics. The Hong Kong-listed shares fell 7 per cent on Monday after NetEase delayed the launch of the blockbuster fantasy game Diablo Immortal, developed alongside Activision Blizzard. Investors had hoped China would become the world’s largest market for the game.
Shares in NetEase dropped on Monday morning after the Chinese gaming company fell foul of China’s censors over a social media post that was suspected of alluding to Winnie the Pooh, a popular way to derisively refer to President Xi Jinping. The company said over the weekend that it would delay the Asian release of the blockbuster game Diablo Immortal, sending its Hong Kong-listed shares down 9 per cent in the morning to HK$137 before they slightly pared losses by midday. Diablo Immortal, an online multiplayer action game developed by NetEase and Activision Blizzard, had been scheduled to launch in China on June 23.