By Nate Wolf
A Cayman Islands holding company helmed by a mysterious Chinese business leader is one of the hottest stocks on the Nasdaq in recent weeks, despite being a complete black box.
Hang Feng Technology Innovation, trading under the ticker FOFO, completed an initial public offering at a listing price of $4 a share on Sept. 12. Shares more than tripled to $12.35 in the first day and skyrocketed a further 226% to $40.32 as of Monday's close.
Excluding those trading at penny stock levels, Hang Feng was this year's top-performing IPO through its first 11 full sessions. It was narrowly ahead of the much larger Circle Internet Group, according to Dow Jones Market Data.
Micro-cap stocks often pop after their trading debut, Angelo Bochanis, an analyst at Renaissance Capital, told Barron's. "These sharp surges are often short-lived," Bochanis added.
But Hang Feng's tiny $5.5 million offering belies apparent connections to big-money Chinese interests. Chinese investor and entrepreneur Qian Fenglei, a purported ally of Alibaba Group founder Jack Ma, is the company's chairman, majority shareholder, and one of its primary clients, according to a Securities and Exchange Commission filing.
It's tough to see why Hang Feng would be worth its current $277 million market capitalization on its own. The company operates a Hong Kong-based consulting firm and a collection of asset-management subsidiaries, according to a prospectus. It posted just $2 million in revenue in 2024, and services provided to Fenglei himself or HF Holdings -- another entity controlled by Fenglei -- accounted for 38% of that revenue.
"We are subject to significant client and industry concentration risk and risks associated with dependence on a related party," the prospectus said.
Neither Hang Feng nor Fenglei responded to Barron's requests for comment. Ma also couldn't be reached to verify whether the pair are friends, as Chinese news sources have reported.
Fenglei's background is murky, too. In 2020, three assailants allegedly stabbed him and an assistant outside a members-only club in Hong Kong, according to local news reports. The South China Morning Post identified him as a "mainland Chinese billionaire" in stories about the incident, but Fenglei's exact fortune wasn't immediately clear. He doesn't appear, for instance, on the Bloomberg Billionaires Index of the world's 500 richest people.
Hang Feng's ticker, FOFO, may provide one clue into what Fenglei is up to. The name appears to be connected to FO, a Web3 communications platform and online token founded by Fenglei earlier this year. Web3 is a term for a decentralized, blockchain-powered internet.
Hang Feng's consulting arm received $150,000 from Fenglei's holding company in 2024 to develop a "comprehensive Web3 development roadmap," the prospectus said. And on Sept. 11, just a day before the IPO, Fenglei applied to register the FO logo as a trademark, according to a U.S. Patent Office filing.
Barron's reached out to Kingswood Capital Partners, the sole book-runner for the IPO, for further information about Hang Feng's ultimate goal and what types of investors have bought up the stock. The investment bank and wealth management firm didn't respond, but experts have some guesses.
"Who's buying these things? Unsophisticated retail investors," said Jay Ritter, a professor of finance at the University of Florida who studies IPO markets. "Institutions aren't touching these $4 offerings."
Judging by the surge in share price, the mystery behind Hang Feng hasn't spooked investors just yet. But they may be left holding the bag if the stock eventually tanks, as many such listings do.
Post-IPO rallies with no obvious catalyst and very little public information of any kind can be fun to watch from the sidelines. Trading them is too risky for our blood.
Write to Nate Wolf at nate.wolf@barrons.com
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September 30, 2025 13:09 ET (17:09 GMT)
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