FangDD Announces Effective Date for Its Substitution Listing Plan

Rhea-AI Summary

FangDD Network Group (Nasdaq: DUO) has announced the effective date for its substitution listing plan. The company will delist its American Depositary Shares (ADSs) from Nasdaq and immediately list its Class A ordinary shares for trading on September 30, 2024. Each ADS represents one Class A ordinary share. The Bank of New York Mellon, acting as the depositary, will initiate a mandatory exchange of all ADSs into Class A ordinary shares on the same date. VStock Transfer, will serve as the U.S. transfer agent for the substitution listing. ADS holders do not need to take any action, and no fees will be charged for the mandatory exchange. Nasdaq may suspend ADS trading prior to the exchange date.

Positive

• Transition from ADSs to Class A ordinary shares maintains Nasdaq listing
• No action required from ADS holders for the mandatory exchange
• No fees charged to ADS holders for the exchange process

Negative

• Potential temporary suspension of ADS trading before the exchange date
• Change in trading structure may cause short-term market volatility

Insights

Financial Analyst

The announcement of FangDD's substitution listing plan marks a significant shift in the company's trading structure. By delisting ADSs and directly listing Class A ordinary shares on Nasdaq, FangDD is streamlining its investor access. This move could potentially increase liquidity and reduce costs associated with maintaining an ADS program.

However, investors should be aware that this change might impact trading dynamics and share price in the short term. The mandatory exchange of ADSs to ordinary shares could cause some volatility around the September 30 transition date. Long-term implications depend on how smoothly the transition is executed and whether it attracts a broader investor base. Overall, while this is a structural change, its impact on the company's fundamental value is likely neutral.

Legal Expert

FangDD's substitution listing plan raises several legal considerations. The company appears to be complying with regulatory requirements by providing clear notice and working with the necessary parties (Nasdaq, the Depositary and the U.S. Transfer Agent). The mandatory exchange of ADSs to ordinary shares is a critical point that could potentially lead to disputes if not executed properly.

Investors should note that this change may affect their voting rights and shareholder protections. While the underlying ownership remains the same, the shift from ADSs to direct ownership of Class A ordinary shares might alter certain legal aspects of shareholding. It's important for investors to review any changes in their rights and responsibilities under this new structure. The smooth execution of this plan will be essential to avoid legal complications and maintain investor confidence.

Market Research Analyst

FangDD's decision to switch from ADSs to direct listing of Class A ordinary shares could be seen as a strategic move to enhance market visibility and potentially attract a wider investor base. This change might make the stock more accessible to both U.S. and international investors who prefer trading ordinary shares directly.

However, the market's reaction to this change remains uncertain. There could be a period of adjustment as investors and traders adapt to the new structure. The success of this move will largely depend on how well FangDD communicates the benefits of this change to its current and potential investors. It's also worth monitoring if this trend of Chinese companies simplifying their U.S. listing structure continues, as it could signal a broader shift in how foreign companies approach U.S. markets. Overall, while the immediate market impact might be neutral, the long-term effects on liquidity and investor interest will be important to watch.

SHENZHEN, China, Sept. 18, 2024 (GLOBE NEWSWIRE) -- Fangdd Network Group Ltd. (Nasdaq: DUO) (“FangDD” or the “Company”) today announced the effective date of its substitution listing plan.

As previously announced, the Company and The Bank of New York Mellon (the “Depositary”), acting as the depositary for the Company’s American depositary shares (the “ADSs”), intend to delist the ADSs from The Nasdaq Capital Market (“Nasdaq”). Following the delisting of ADSs, the Company will immediately list its Class A ordinary shares currently represented by ADSs for trading on Nasdaq on September 30, 2024, Eastern Time (the “Substitution Listing”). Each ADS represents one Class A ordinary share of the Company, par value $0.0005625 per share. VStock Transfer, LLC serves as the Company’s U.S. transfer agent (the “U.S. Transfer Agent”) for the Substitution Listing.

To facilitate the Substitution Listing, the Depositary will call for the surrender of all ADSs to be exchanged into the Company’s Class A ordinary shares on a mandatory basis (the “Mandatory Exchange”) on September 30, 2024 (the “Exchange Date”). On the Exchange Date, it is anticipated that trading of the Company’s Class A ordinary shares will have commenced on Nasdaq and trading of the ADSs will have been suspended.

For ADSs held by participants of The Depository Trust Company (“DTC”), the Depositary will instruct the U.S. Transfer Agent to register a transfer of the number of deposited shares represented by those ADSs to DTC for allocation by DTC to the participant accounts entitled to them. For ADSs held by owners other than DTC, the Depositary will instruct the U.S. Transfer Agent to register transfers of the number of deposited shares represented by those ADSs in the names of the respective owners.

ADS holders do not need to take any action, and the Depositary will not charge ADS holders any fees in connection with the Mandatory Exchange. Prior to the Exchange Date, Nasdaq may suspend the trading of the Company’s ADSs until such time as the Mandatory Exchange and the Substitution Listing shall have taken effect or as otherwise determined by Nasdaq.

About FangDD

Fangdd Network Group Ltd. (Nasdaq: DUO) is a customer-oriented property technology company in China, focusing on providing real estate transaction digitalization services. Through innovative use of mobile internet, cloud, big data, artificial intelligence, among others, FangDD has fundamentally revolutionized the way real estate transaction participants conduct their business through a suite of modular products and solutions powered by SaaS tools, products and technology. For more information, please visit http://ir.fangdd.com.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “aim,” “anticipate,” “believe,” “estimate,” “expect,” “hope,” “going forward,” “intend,” “ought to,” “plan,” “project,” “potential,” “seek,” “may,” “might,” “can,” “could,” “will,” “would,” “shall,” “should,” “is likely to” and the negative form of these words and other similar expressions. Among other things, statements that are not historical facts, including statements about the Company’s beliefs and expectations are or contain forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement. All information provided in this press release is as of the date of this press release and is based on assumptions that the Company believes to be reasonable as of this date, and the Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

Investor Relations Contact

Ms. Linda Li
Director, Capital Markets Department
Phone: +86-0755-2699-8968
E-mail: ir@fangdd.com

FAQ

When will FangDD (DUO) delist its ADSs and list its Class A ordinary shares on Nasdaq?

FangDD (DUO) will delist its ADSs and list its Class A ordinary shares on Nasdaq on September 30, 2024, Eastern Time.

What is the exchange ratio for FangDD's (DUO) ADSs to Class A ordinary shares?

Each ADS of FangDD (DUO) represents one Class A ordinary share of the company, par value $0.0005625 per share.

Do FangDD (DUO) ADS holders need to take any action for the mandatory exchange?

No, FangDD (DUO) ADS holders do not need to take any action for the mandatory exchange. The process will be handled automatically by the depositary and transfer agent.

Will there be any fees charged to FangDD (DUO) ADS holders for the mandatory exchange?

No, the Depositary will not charge FangDD (DUO) ADS holders any fees in connection with the mandatory exchange.