Reuters
Shares of Chinese smartphone maker Xiaomi Corp., which raised $4.7 billion in one of Hong Kong’s largest tech initial public offerings in recent years, fell on their debut Monday as the broader market rose.
The lackluster start came after Xiaomi priced its IPO at the low end of an expected range, giving the company a valuation of $54 billion. If the shares perform poorly in the coming days and weeks, they could hurt the prospects of other tech companies who are preparing their own multibillion-dollar listings in the city.
“Investors are skeptical about Xiaomi’s growth momentum as the global smartphone market seems to be on a downward slope.”
Xiaomi opened at HK$16.60, 2.4% lower than its IPO price of HK$17. Shares fell as low as HK$16 a share and closed at HK$16.62. The broader Hang Seng Index rose 1.4%.
The stock that was made available to retail investors drew orders represented 9.5 times the shares offered, the company said Friday. That is far short of the oversubscription rates for other tech IPOs in Hong Kong. Orders for a separate block for foreign investors only slightly exceeded the amount offered.
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