In November 2011, Muddy Waters, a U.S. short-seller fund, accused Focus Media of overstating the size of its business. Focus Media's stock price fell sharply at first but then rebounded as the company countered the attacks. In March 2012, however, the U.S. Securities and Exchange Commission launched its own investigation and pressured Focus Media to amend some of its filings. A few months later, CEO Jiang partnered with a group of private equity firms, to take Focus Media private in a deal valued at more than $3.7 billion—China's largest-ever buyout. In the following months, several Chinese companies followed suit and delisted from the NASDAQ. In mid-2014, the PE firms in the consortium wanted to cash out of their equity positions, and Jiang faced the difficult decision of what to do next. Excerpt UVA-F-1722 Rev. Jan. 26, 2015 Focus Media Holding Ltd. (2014) The past decade had been a wild ride for Jason Jiang, the founder, chairman, and CEO of Focus Media Holding, a multiplatform digital advertising and media company. Shortly after he founded the company in 2003, he was named Media Man of the Year by Media magazine. Building on its success as the leading digital media network in China, Focus Media went public in July 2005 in the largest initial public offering (IPO) of a Chinese company on NASDAQ (ticker: FMCN) up to that time. In 2006 and 2007, China's stock market experienced a dramatic price appreciation followed by a wave of companies seeking the prestige that came with being listed on the NYSE or NASDAQ (Exhibit 1). At the peak of the wave in 2010, China-based firms represented more than 25% of all IPOs listed on U.S. stock exchanges (Exhibit 2). But investor sentiment regarding the U.S.-listed Chinese firms weakened when analysts started to suspect business and accounting fraud in some of the U.S.-listed Chinese firms. In November 2011, Muddy Waters, a U.S. short-seller fund, accused Focus Media of overstating the size of its business. Focus Media's stock price fell sharply at first but then rebounded as the company countered the attacks. In March 2012, however, the U.S. Securities and Exchange Commission (SEC) launched its own investigation and pressured Focus Media to amend some of its filings. A few months later, Jiang partnered with a group of private equity (PE) firms, including the Carlyle Group, to take Focus Media private in a deal valued at more than $ 3.7 billion—China's largest-ever buyout. In the following months, several Chinese companies followed suit and delisted from the NASDAQ. In mid-2014, the PE firms in the consortium wanted to cash out of their equity positions, and Jiang faced the difficult decision of what to do next. Should the company stay private by going through a leveraged recap or secondary buyout of the PE stakes? Would the company be able to go public again, this time with a listing on the Hong Kong Stock Exchange? And would Focus Media be well received in Hong Kong after its turbulent history in U.S. markets? . . .