And 3) when you are buying a position in a company, take some time to get to know what you are buying. A half dozen shell companies through the BVI with no assets until you get to Hong Kong? I might dock that one a bit
This is a surprisingly common way for Chinese companies to get listed in overseas stock markets. Netflix has a good documentary about the practice called "The China Hustle"
Indeed, one wonders what sort of due diligence the investors conducted.. I suspect (since convoluted shell structures are not (at all) uncommon in practice) it could have been that they weren’t actually aware of the full potential ramifications, or to the extent that they were, they didn’t imagine it’d go to the (literally) extreme scenario. In any case, a tale of caution this certainly is.
There are plenty of Lenny stock punters who gamble full well knowing they don’t know what’s going on underneath. They expect larger returns in exchange for the added risk.