The Motley Fool, one of the biggest stock investment advice websites in the US, announced it will exit the Hong Kong market, citing an uncertain outlook in the wake of political events such as the national security law and escalating US-China tensions.
The company, which provides free and paid content to millions of individual investors worldwide, decided to close its outpost in Hong Kong after two years of operation. It follows its exit from the Singaporean market over regulatory issues in December.
“Traditionally, most foreign companies operating here (like The Motley Fool) look to leverage Hong Kong’s freewheeling capital flows, transparency of information, and western rule of law to access the China market,” said Hayes Chan, lead analyst at Motley Fool Hong Kong, in a letter posted on its website on Monday.
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But months of anti-government protests led Hong Kong into a prolonged political struggle, while the introduction of a national security law tailor-made by Beijing drew fresh international attention to the city’s unique “one country, two systems” model. The US-China decoupling also caught the financial hub “in the eye of a geopolitical storm,” he said.
“With all those uncertainties, it’s hard to make predictable decisions to grow our Foolish business here over the next three to five years,” Chan added.
The Motley Fool, founded in 1993 and headquartered in the US state of Virginia, is among the most well-known websites among retail investors globally. Competing with sites such as Seeking Alpha and TheStreet, it publishes free articles on topics like which stocks to buy and how to value a company, and offers premium service packages priced from US$149 to US$13,999 a year.
The company employs more than 400 people and generates annual revenue of US$8.3 million, according to Owler, a company database. In the US, its analysts have testified before Congress on issues including the collapse of the Enron Corporation on behalf of ordinary small investors.
Despite the reasons cited in the letter, some market participants pointed out that the company has faced intense competition from content providers in Hong Kong – such as the Chinese online investment publication Gelonghui – and never quite gained a foothold in the market.
“My opinion is that this is mainly a business decision,” said Alex Wong, director of asset management at Ample Capital. “Their US services are good, [but] few people are aware of Motley Fool in Hong Kong.”
The Motley Fool Hong Kong has some 2,248 followers on Facebook, while its main US page is followed by over 853,500 people.
The company ceased its operation in Singapore following a regulatory bind with the Monetary Authority of Singapore in December, according to a report by The Business Times. It also has branches in Japan, Germany, the UK, Australia and Canada.
The national security law, imposed by China’s legislators on Hong Kong in June, bans secession, subversion, terrorism, and collusion with foreign forces. The legislation has drawn an international backlash and sanctions from the US, as critics warned the vaguely-worded law with sweeping powers is a threat to freedoms in Hong Kong.
The Motley Fool did not immediately respond to requests for comments.
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