Xiaomi shares fall as option freeze ends

Business | Tereza Cai 9 Jan 2019

Phone maker Xiaomi (1810), the first Hong Kong-listed weighted voting right stock, saw its price plunge 7.5 percent from the last trading day to HK$11.10, hitting a record low since listing on July 9, 2018.

The decline came as JPMorgan Chase lowered the target price by 42 percent from HK$18 to HK$10.50, with the half-year frozen period of Xiaomi's first batch of stock options ending today.

As of March 31, 2018, 5,500 out of its 14,513 employees had taken up the employee stock options, allowing them to buy stock at the striking price. If the striking price is lower than the market price, the difference is the profit earned by executing the options.

Xiaomi said that every primary employee has about 10,000 to 15,000 stock options on average. Also, it estimated that the striking price of those unexecuted stock options would be less than HK$3.07 per share.

Before the end of 2017, there were 190 million units of unexecuted stock options of Xiaomi, with the average striking price of about HK$8 per share.

Xiaomi's initial public offering price was HK$17, and the trading price once reached HK$22.20.

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