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China 'Metaverse' stocks tumble on state media warning, regulators' attention - Metro US

China ‘Metaverse’ stocks tumble on state media warning, regulators’ attention

FILE PHOTO: Investors stand in front of an electronic board showing stock information on the first trading day after the week-long Lunar New Year holiday at a brokerage house in Shanghai

SHANGHAI (Reuters) -Chinese shares seen with links to “Metaverse”, a virtual shared space based on virtual reality technologies, slumped on Thursday after their recent surge raised regulatory eyebrows and prompted state media to warn against investing in them.

Investment is not a virtual game and investors buying Chinese stocks hoping to profit from Metaverse will likely end up in tears, China’s official Securities Times warned in a commentary on Thursday.

If people “blindly invest in such grand and illusionary concept as Metaverse, they will be burnt in the end,” it said.

The commentary came a day after the Shenzhen Stock Exchange sent a letter to Zhejiang Jinke Culture Industry Co, urging the mobile Internet firm to substantiate its claim that it has the customer base to develop Metaverse products.

The bourse also asked if the company – whose share prices surged roughly 35% this week – played a part in boosting its own stocks with the hot concept.

Most Metaverse-related stocks tumbled on Thursday morning.

Wondershare Technology and Wahlap Technology both slumped over 10%, while Goertek lost over 8%. AVIT Ltd tumbled 13%, while Perfect World shed 5%.

China’s top securities regulator, Yi Huiman, told a conference on Monday that exchanges should have a better understanding of investor behaviours in the Internet age.

Yi’s comment comes amid heightened concerns over Chinese regulators, as Beijing launched a flurry of crackdowns this year on sectors ranging from technology to private tutoring.

Shenzhen Zhongqingbao Interaction Network, whose shares surged over 60% this week after the company publicly posted an article about Metaverse, said in an exchange filing on Wednesday that it is still in initial stages to explore the business, and cautioned investors against risks.

The Securities Times commentary also flagged risks to investors on Thursday.

“It’s important for investors to tell the difference between genuine trends, and beautiful ‘bubbles’.”

(Reporting by Samuel Shen and Andrew Galbraith; Editing by Stephen Coates and Ana Nicolaci da Costa)

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