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Xiaomi sinks after billions of shares are unlocked for sale

Hong Kong

MANY Xiaomi Corp investors, who could only watch as the stock shed US$14 billion in market value, are now able to join in on the selling.

Expiring on Wednesday was the six-month lockup period that followed the company's Hong Kong debut, during which some employees and cornerstone investors were banned from disposing of their allocated shares. It's been painful: Xiaomi has dropped to HK$10.34 (S$1.79) from a listing price of HK$17, losing another 6.9 per cent on Wednesday on almost seven times its average volume of the past three months.

More than three billion shares were unlocked, equal to about 19 per cent of those outstanding, according to data compiled by Bloomberg. The lockup period for controlling shareholders - such as chairman and founder Lei Jun - was extended on Wednesday for another 365 days, Xiaomi said in a statement. It was previously due to expire in July.

Beijing-based Xiaomi sought a valuation that would have made it the most expensive smartphone maker in the world. The stock trades at 16 times projected 12-month earnings, less than half its July multiple. It is still 32 per cent more expensive than Apple. BLOOMBERG

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