Xiaomi oh my: Phone maker’s IPO shot for the moon… and missed
Chinese company Xiaomi (pronounced show-me, show as in “shower”) debuted on the Hong Kong Stock Exchange yesterday to less-than-thunderous applause.
The company planned to raise enough in the IPO for a $100B valuation, but investors only had enough gas in the tank to get it to $54B, with stock dipping as much as 6% and closing just 1% up from the open price.
Analysts speculate that Xiaomi’s valuation (which priced it at $2.12/share) may have been overly ambitious compared to the likes of already-public phone makers like Apple, and investors simply weren’t buying the hype.
The recent tariff-off between the US and China also may have investors wary, as Xiaomi will need to break into the American market at some point if it wants to keep growing.