HONG KONG (Jan 10): Xiaomi Corp’s bad week got worse Thursday as more investors rushed to cut their losses.
The stock fell 4.1% as of 10:18am in Hong Kong, taking its three-day decline to 18%, or US$6.3 billion in market value. Analysts at Goldman Sachs Group Inc and China International Capital Corp were the latest to cut their price targets on the Chinese smartphone maker, joining at least five others who have tempered their estimates just this week.
Billions of Xiaomi shares have been unlocked for sale after the six-month lockup period that followed the company’s debut expired. That’s enabled many shareholders, who could only watch as the stock shed US$14 billion in market value, to finally join the selling. A flurry of off-exchange block trades showed that some have taken the opportunity to offload the stock, even though Xiaomi is nowhere near its HK$17 listing price.
Analysts have been trimming their profit and sales forecasts for Xiaomi, blaming China’s slowing smartphone market and intensifying competition from rivals like Huawei Technologies Co. Xiaomi was one of the most hyped initial public offerings of 2018, with bankers initially touting a valuation of as much as US$100 billion. The company’s market capitalization has dropped to about US$30 billion.