Shares of Xiaomi lost 19% of value after IPO

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Shares of Xiaomi lost 19% of value after IPO

August 22, 2018 - 16:00
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Xiaomi Corp. raised significant amount of money during its IPO, promising investors to become fast-growing Internet-company. However, now some investors start losing faith.

Photo © Raysonho @ Open Grid Scheduler / Grid Engine - Own work, CC0, via Wikimedia Commons

Xiaomi Corp. raised significant amount of money during its IPO, promising investors to become fast-growing Internet-company. However, now some investors start losing faith.

Producer of budget smartphones based in Beijing lost 19% compared with peak level that its shares reached after IPO.

Xiaomi puts two major strategic goals: international expansion and diversification into online services like Apple Inc. Today the company is busy building stores that will support its developemnt in such markets as India and Russia.

However, analytics are afraid recently that tech stocks will get into trade tension waves. Besides, Xiaomi encountered competition on behalf of Chinese companies in international markets, including Oppo and Huawei. Internet services of Xiaomi are now popular only in China.

The only way to expand at Internet serices market is to increase sales of smartphones, which Xiaomi offers for attractive price. Demand in China is still quite high and can support Xiaomi's strategy in short run. However, to grow further, the company needs to expand internationally.

 

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