Mobvoi, a Chinese AI firm backed by Google, experienced a significant drop in its stock price during its initial public offering (IPO) in Hong Kong, closing down by up to 22%. This downturn marks a rough start for the company in a week that saw similar declines for other Hong Kong debuts. Founded in 2012 by former Google employees, Beijing-based Mobvoi has established itself in the AI sector.
The company is well-known for its Ticwatch smartwatches and Chumenwenwen voice-activated search services. Mobvoi’s partnership with Google began in 2015, representing Google’s first direct investment in China since the tech giant withdrew its search engine from the market in 2010.
On its first trading day, Mobvoi’s shares opened at a disappointing figure, even though the IPO was priced near the lower end of the anticipated range, fetching HK$321 million (approximately $41 million). This figure fell short of the $200 million to $300 million that Mobvoi had initially aimed for last year.
The decline in Mobvoi’s stock occurred against a backdrop of broader gains in the Hong Kong and Asian stock markets, underscoring the IPO’s underperformance relative to sector trends. Despite a slight recovery, Mobvoi‘s shares closed at HK$3.68, below the offering price of HK$3.80 per share, which was already set at the lower spectrum of the HK$3.70 to HK$4.10 marketed range.
This series of disappointing IPOs adds further strain to Hong Kong’s equity capital market, which experienced a significant downturn last year, recording its lowest IPO proceeds in over two decades. Market analysts attribute this decline to ongoing concerns about China’s economic growth and regulatory environment, which continue to impact investor confidence and market performance.
