Xiaomi has seen significant growth this year owing in part to the woes of its major competitor Huawei that is caught in between the polarized US-China trade wars.

Chinese mobile smartphone maker Xiaomi Corp (HKG: 1810) has suspended its trading on the Hong Kong Stock Exchange (HKEX) following its latest stock placement that ranks as one the biggest the city has ever recorded. Per a report from Business Times, Xiaomi revealed in a Hong Kong exchange filing that trading would be halted Wednesday, without stating any reasons.

Per the reports, Xiaomi has yet to disclose the full details of the stock placement sales, the record secured by Bloomberg revealed that the company sold 1 billion shares at the lower range of HK$23.70 each to pull off about USD3.1 billion. This placement share sale comes at a discount of 9.4% when compared to the latest closing value of Xiaomi’s stock at HK$26.15.

Halting trading in the manner in which Xiaomi had it is quite unusual and while a Xiaomi represent was not available for comments at press time, it is generally expected particularly in the case of the Hong Kong Stock Exchange for a company to halt trading only when certain inside information has been leaked before an official announcement has been made.

“We are still figuring out the reason for the suspension,” said Castor Pang, head of research at Core Pacific-Yamaichi International Hong Kong. “It’s definitely unusual because other companies which had share placements usually file the official announcements soon after pricing. It’s hard to know what’s going on.”

While this unprecedented halt is inevitable, the impact is currently being seen on the shares of Xiaomi which is currently down by 7.07% to HK$24.30 at the time of writing. The plunge in the share price of Xiaomi has also dragged down the Hang Seng Index which slipped 0.1 percent to 26,532.58. The 140% growth of Xiaomi thus far this year appears to have been dented, hopefully temporarily with its current stock price dip.

Xiaomi Stock Placement and Fundraising Goals

The firm Xiaomi Corp has seen significant growth this year owing in part to the woes of its major competitor Huawei Technologies Co., Ltd that is caught in between the polarized US-China trade wars. Huawei has received sanctions that have crippled its efficiencies with respect to sourcing the chips for use in its smartphones.

While Huawei reels in the face of this sanction and more, Xiaomi was pushing forth to secure a larger market dominance. With an already large customer base, both in China, Asian countries, and around the world. One of the key ways Xiaomi hopes to utilize the scheduled funding through the stock placement is expected to used to drive more market penetration strategies.

“The proceeds from the equity placement will be used for business expansion, investments to increase market share and strategic ecosystem investments,” as noted in the filing document presented or shared.

Business News, Market News, News, Stocks

Benjamin Godfrey

Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.

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