Chinese handset manufacturer Xiaomi seems to be going south in the trade market as, since its mid-July peak, Xiaomi shares have fallen more than 40% while its market value has shrunk dramatically.
Xiaomi was listed in Hong Kong Stock Exchange on July 9 for HK USD 17 rising to a peak of HK USD 22 shortly after. On October 11, the company’s stock plunged nearly 10% closing down 7.99% at HK USD 12.66.
Xiaomi’s road to IPO, however, has been rocky even before the trade tensions. The world’s fourth-largest smartphone maker priced an IPO that gave it a valuation of about USD 54 billion—half of what was originally hoped for.
The company makes 70% of its revenues from smartphones, which apparently caused concern if the company can compete with the likes of Apple and whether it can continue to capture the market among low-priced competitors such as Oppo and Vivo.
To counter that, Xiaomi has been trying to reinvent itself as an online service provider. In September, the company announced plans to put younger executives in leadership positions. The company will be undergoing a series of internal restructuring as well.