Sell-off in Meituan’s shares may be approaching as post-IPO lockup period ends
Mar 13, 2019 (China Knowledge) - Meituan Dianping may be in for a storm next week its six-month post-IPO lockup period whereby employees and cornerstone investors are banned from selling their shares ends next week.
Since being listed in September last year, the company is done 24% from its listing price and key investors who could only watch their shares lose value may look to sell their shares.
Up to 2.6 billion of the company’s publicly floated shares held by pre-IPO and cornerstone investors will be unlocked next week with an additional 512 million which are held by employees also set to be unlocked.
Earlier this year, Chinese smartphone maker Xiaomi also saw a massive sell-off, losing USD 6 billion in market value over three days following the end of its post-IPO lock up period as early investors in the company looked to make their exits.
For Meituan, shareholders who have been with the company since its first funding rounds can still expect to receive a handsome profit with shares bought in 2010 reported to have just cost HKD 0.40 each.
The company which was one of the most highly anticipated IPOs on the Hong Kong stock exchange last year has failed to deliver bringing in some of the worst returns. Following its recent earnings announcement, analysts from Bernstein had downgraded the stock, citing intensifying competition from rivals Alibaba Group.
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