Xiaomi raises $3.05 billion Dollars following its IPO

Chinese Smartphone Maker Xiaomi Falls in Hong Kong Trading Debut

Xiaomi opened at HK$16.60, 2.4% lower than its IPO price of HK$17.

Shares lost about 4 percent in early trading but rebounded to 17 Hong Kong dollars ($2.17) at midday.

After a sizzling 2017, Hong Kong's tech listings are now struggling.

The company had grown from a small startup to become the world's fourth-largest smartphone vendor at the end of a year ago.

Xiaomi raised around 4.7 billion United States dollars in the IPO.

By contrast, China Literature Ltd, the e-book arm of Tencent Holdings, late previous year raised $1.1 billion in its Hong Kong IPO amid heavy demand, with the retail portion being 625 times oversubscribed.

The weak pricing values the firm, which also makes internet-connected home appliances and gadgets, at about $54 billion, nearly half its original US$100 billion ambition earlier this year.

Xiaomi sold about 2.18 billion shares, making the IPO the largest in the technology sector since Alibaba Group Holding Ltd raised $25 billion in NY in 2014.

Let us know in the comments if you think Xiaomi will do well in the medium and long term in terms of its stock price. A lot of companies that went public in 2017 and 2018 have seen their share prices plummeting and the situation was made worse thanks to the ongoing trade war between China and the U.S.

Typically companies are valued on a multiple of profits or sales. Ping An Healthcare and Technology Co Ltd dropped below its IPO price on the second day of trading in May.

The stock price at current levels is nearly identical with the $45 billion valuation that Xiaomi achieved at the end of 2014 and the start of 2015, when the company was at its height.

It's also a disappointment for Hong Kong, which this year revised regulations to allow tech companies with uneven voting structures like Xiaomi to float.

During his speech at the launch ceremony, Lei said that Xiaomi had attracted investment from more than 100,000 investors, including Li Ka-shing, a Hong Kong-based business magnate, Tencent's Pony Ma, and Alibaba founder Jack Ma, The Paper reports.

Lei has described Xiaomi as a "new species" of company with what he describes as a "triathlon" business model combining hardware, internet and e-commerce services. The deal was led by CLSA, Goldman Sachs and Morgan Stanley.

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