Chinese ‘Metaverse’ shares tumble on state media warning and regulators’ attention

SHANGHAI, Sept. 9 (Reuters) – Chinese stocks seen with links to “Metaverse,” a shared virtual space based on virtual reality technologies, collapsed on Thursday after their recent increase raised regulatory eyebrows and prompted the media state to warn against their investment.

Investing is not a virtual game and investors who buy Chinese stocks in the hope of profiting from Metaverse are likely to end up in tears, China’s official Securities Times warned in a comment on Thursday.

If people “blindly invest in a concept as grandiose and illusory as Metaverse, they will end up being burned,” he said.

The comment came a day after the Shenzhen Stock Exchange sent a letter to Zhejiang Jinke Culture Industry Co (300459.SZ), urging the mobile internet company to substantiate its claim that it has the customer base to develop Metaverse products.

The stock market also asked if the company – whose stock price has jumped about 35% this week – played a role in increasing its own shares with the hot concept.

Most of the Metaverse-related shares fell on Thursday morning.

Wondershare Technology (300624.SZ) and Wahlap Technology (301011.SZ) both fell more than 10%, while Goertek (002241.SZ) lost more than 8%. AVIT Ltd (300264.SZ) fell 13%, while Perfect World (002624.SZ) fell 5%.

China’s leading securities regulator Yi Huiman told a conference on Monday that the stock markets should have a better understanding of investor behavior in the internet age.

Yi’s comment comes amid heightened concerns about Chinese regulators, as Beijing this year launched a wave of crackdowns in industries ranging from tech to private tuition.

The Shenzhen Zhongqingbao interaction network (300052.SZ), whose shares have jumped more than 60% this week after the company published an article on Metaverse, said in an exchange report on Wednesday that it was still in the early stages to explore the business, and warned investors of the risks.

The Securities Times commentary also pointed to risks for investors on Thursday.

“It is important that investors differentiate between the real trends and the beautiful ‘bubbles’.”

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

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