Invetsing.com - Chinese tech giant Xiaomi Corp (HK:1810) announced on Wednesday morning that its controlling shareholders pledged not to sell the company’s shares after the lock-up period expired following its IPO.
Xiaomi says its CEO Lei Jun and other controlling shareholders Smart Mobile Holdings Limited and Smart Player Limited voluntarily agreed to not dispose of any shares of the company for a further period of 365 days starting from January 9. The move was taken “for the purpose of expressing their confidence in the long term value of the company”.
However, the news did not help boost Xiaomi’s share price, which instead dropped 4.7% to HK$10.58 by 1:46 AM ET (06:46 GMT), hitting a new low.
About 19% or more than three billion shares in the company became free to be traded today after a six-month lock-up period.
Since its high-profile IPO on July 9, 2018 that set the offer price at HK$17, Xiaomi’s share price has been plummeting. According to media reports, the company positions itself as an internet company but relies heavily on hardware to generate revenue, raising concerns among the investors. The continuing U.S.-China trade war was also cited as a catalyst for the selling in the company.