Xiaomi Stock: $5.5bn Share Placement Triggers Slide

Xiaomi shares plunged up to 6.6% on Tuesday after the Chinese tech giant announced a substantial share placement valued at 42.5 billion Hong Kong dollars (approximately $5.5 billion). The offering, initially planned for 750 million shares but expanded to 800 million during bookbuilding, was priced at a 6.6% discount to Monday's closing price of 57 Hong Kong dollars. By mid-session, shares partially recovered to 54 Hong Kong dollars, representing a 5.3% decline. The market reaction occurred amid broader weakness in Hong Kong markets, with the Hang Seng Index falling 2.2% and the Hang Seng TECH Index dropping 3.4%. Despite the immediate setback, Xiaomi's stock has performed impressively over the past eight months, more than tripling in value-a surge largely attributed to the company's ambitious entry into the electric vehicle market.

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According to company statements, proceeds from the share placement will accelerate business growth, strengthen research and development capabilities, and support general corporate purposes. Xiaomi recently reported a nearly 50% revenue increase in the fourth quarter and raised its electric vehicle delivery target from 300,000 to 350,000 units for 2025, highlighting its commitment to the EV sector. The stock has repeatedly reached new highs this year, buoyed by optimism surrounding Chinese tech shares and developments in artificial intelligence. Analysts continue to monitor Xiaomi's progress in the electric vehicle market, which has become a central component of the company's future growth strategy.