Additional issuance of 26 billion, the stock price plummeted 7%, what is Xiaomi doing

Xiaomi Group, whose share price has soared to a high level, seems to be a little bit retrograde these days.

After the executive’s inappropriate remarks, Xiaomi Group’s US$4 billion (about 26.3 billion yuan) financing has pushed Xiaomi to the forefront.

On the morning of December 2, the trading of Xiaomi Group’s stocks and bonds temporarily ceased at 9:01 a.m. Regarding the reason for the suspension, Xiaomi Group announced at noon that it plans to issue 855 million US dollars of convertible bonds due in 2027, with an initial convertible price of 36.74 Hong Kong dollars. Agreed to place 1 billion shares at HK$23.7. Net financing of US$3.1 billion through share placement. The two together raised nearly $4 billion.

At one o’clock in the afternoon, Xiaomi Group resumed trading, and its stock price once fell by more than 10%. As of the close, Xiaomi Group’s stock price still fell 7.07%, with a turnover of 37.646 billion Hong Kong dollars, and its market value evaporated by more than 45 billion Hong Kong dollars (about 38.2 billion yuan). .

According to the additional price of Xiaomi, it is basically 10% lower than the price before the resumption of trading. After the resumption of trading, the market selling volume increased significantly. According to the use of funds of Xiaomi Group, it is mainly used for:

First, increase working capital to expand business;

Second, investing to increase market share in major markets;

Third, invest in strategic ecosystems;

Fourth, other general corporate purposes.

From the perspective of financing amount, its financing amount of 4 billion US dollars (about 40 billion Hong Kong dollars) is significantly higher than its 2018 IPO financing amount of 24 billion Hong Kong dollars.

The market has obviously responded to Xiaomi Group’s high-level discount placement behavior. In the long run, Xiaomi Group is still a good company.

In fact, the stock price of Xiaomi Group has not been recognized by the market in the past two years.

At the beginning of Xiaomi’s listing, Lei Jun once said that investors who invested in Xiaomi would earn at least double. At that time, Xiaomi’s IPO subscription team was also considered luxurious (including Li Ka-shing, Ma Yun and others). What Lei Jun didn’t expect was that after Xiaomi’s listing, not only did its stock price not double, but it was even cut in half.

Additional issuance of 26 billion, the stock price plummeted 7%, what is Xiaomi doing

In order to boost the stock price, Lei Jun thought of many ways, including extending the restricted period, repurchasing shares, etc. It was not until May this year, against the background of the rise of Internet companies, that Xiaomi’s stock price got out of the “quake”. , Its current stock price is only about 20% higher than the high point at the beginning of listing.

At present, although Lei Jun himself has invested in many companies that have achieved IPOs, and Xiaomi has also shined in the international market (on the one hand, it has benefited from the ban on Huawei), but Xiaomi itself still has problems.

In addition, the reduction of holdings by directors, supervisors and senior managers other than Lei Jun is also one of the important reasons why Xiaomi’s stock price is under pressure.

In September this year, Xiaomi Group announced that director Lin Bin and Apex Star LLC, a wholly-owned subsidiary, signed a block transaction agreement with Goldman Sachs to sell 350 million Class B shares of Xiaomi Company, which accounted for 20% of Xiaomi’s total issued shares. 1.5%.

Lin Bin used to be Xiaomi’s No. 2 person and an important helper for Lei Jun in starting a business. According to the price range of Lin Bin’s reduction of 22.55 Hong Kong dollars per share to 22.85 Hong Kong dollars per share, the amount Lin Bin cashed out from Xiaomi was about 8 billion Hong Kong dollars.

In fact, since Xiaomi’s listing, Lin Bin’s reduction of holdings has never stopped.

In August 2019, when Xiaomi’s stock price was at its lowest, Lin Bin sold 41.3 million Xiaomi shares for three consecutive days, accumulating HK$370 million in cash. At that time, Xiaomi Group responded immediately that Lin Bin’s cash out was mainly for personal funds, and the funds may be used for charity. At that time, Lin Bin promised not to reduce his holdings for 12 months.

This year, as soon as the promised time came, Lin Bin reduced his holdings of Xiaomi’s 8 billion Hong Kong dollars in shares, and promised not to reduce his holdings within 5 years, the same routine, the same rhetoric.

The reduction of holdings by executives has made the market fearful. Compared with Internet companies in the same period, Xiaomi’s increase is not much. In addition, after Xiaomi went public, Lei Jun also began to make internal adjustments and announced a new partnership plan.

Including this additional issuance, some people in the market believe that the growth of Xiaomi Group’s performance is mainly due to seizing the share of some Huawei products. Once Huawei recovers in the future, Xiaomi’s performance is bound to come under pressure again. high-end machine market.

It is foreseeable that Xiaomi’s high-end road will not be easy in the future. How to get rid of the “cost-effective” label is one of the obstacles for Xiaomi to enter the high-end market.

The Links:   LQ10D36C LQ057Q3DC03