Xiaomi drops in debut as investors question Internet vision


Xiaomi priced the IPO at the bottom of the range it offered, in a deal worth $4.72 billion - the world's biggest technology float in nearly four years.

Xiaomi CEO and co-founder Lei Jun acknowledged the unfortunate timing in a letter to employees Sunday that said, "Our IPO also comes with huge challenges and heavy responsibilities".

"Trading below the issue price suggested that investors still felt the valuation of the stocks was relatively high compared with (fellow Chinese giant) Tencent and Apple", Linus Yip, chief strategist at First Shanghai Securities, told Reuters.

China's Xiaomi, the world's fifth biggest seller of smartphones, made an underwhelming public debut after it hit the Hong Kong Stock Exchange amid concerns around an ongoing trade war between the USA and China.

Its shares fell Monday even though the broader Hong Kong market was up about 1.5%.

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Speaking at the ceremonial opening of trading, Xiaomi's chairman Jun Lei acknowledged that the timing of the IPO might not be optimal given the state of trade friction between the U.S. and China.

"We are different from many of our peers", said Liao, shrugging off concerns a bearish sentiment towards technology stocks could weigh on WeDoctor's performance in Hong Kong.

At Monday's closing price the company had a market value of $53.3 billion.

The company, which makes phones to rival Apple's iPhone, had hoped to hit a valuation of $100bn in the float, but is now valued at around $53bn.

Xiaomi's float was the first under the city's new rules allowing firms to weight voting rights in favor of company founders, as part of efforts to encourage more tech groups to choose Hong Kong over NY, its arch-rival. Goldman Sachs Group Inc., Morgan Stanley and CLSA Ltd. are leading Xiaomi's IPO as joint sponsors.