: In stock trading what is an ADS stock? When the company says the ADS stock is worth 10 ordinary shares what do they mean?

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I’m just trying to make sure I understand correctly. Does it mean if I buy this ADS stock at like $10. This one stock= 10 shares of the company? Meaning I just actually brought it at $1 a share? Are there benefits to this?

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3 Answers

Anonymous 0 Comments

The only benefit is you’re buying it in USD on a US stock exchange. That is likely easier and more efficient for you (if you have a US brokerage account) than buying it on its local stock exchange overseas in a non-US currency.

Anonymous 0 Comments

U.S. investors can purchase ADSs of some foreign companies that aren’t technically listed in the U.S. You can then convert those ADSs into ordinary shares. Sometimes it’s 1:1, sometimes it’s 1:10, whatever. The ratio is determined really on a basis to just make sure the price is somewhat equivalent.

But yes, if you buy an ADS for $10 that converts into 10 ordinary shares, then effectively you’ve purchased 10 ordinary shares for $1 per share.

Edit: I don’t say this to be mean, but you sound unsophisticated enough about this that I would caution you in buying this stock simply because it’s clear you don’t have a good handle on the financial arrangements of what you’re doing.

That being said, this appears to be a legit company that has hired serious banks to market this IPO, with the top of the very top white shoe law firms advising on the deal. You can read all about it here:

https://www.sec.gov/Archives/edgar/data/1954042/000110465924059882/tm229938-35_424b4.htm

Anonymous 0 Comments

Would help to know which company you’re talking about. An American depositary share *in general* is just a US-dollar denominated share in a foreign company available on a US stock exchange. No idea why a given company’s ADS would be worth 10x their other shares, sounds like an arbitrage opportunity.