Meitu shares plunge on high-volume sales

Jun 15, 2017

Shares of Chinese selfie app maker Meitu plunged on Thursday, at one point slipping to 8.30 Hong Kong dollars, down 8.79% from Wednesday. A large shareholder moved to sell immediately after the six-month lock-up period expired, precipitating a sell-off.

Meitu shares were first listed on the Hong Kong Stock Exchange on December 15.

According to local media, a large shareholder sold 66 million Meitu shares at the issue price of HK$8.5 before the market opened on Thursday. That news motivated other investors skeptical about Meitu to sell their shares, pushing the price further down.

Meitu’s share price has been highly volatile, hitting this year’s low of HK$8 in January, then later surging to the HK$23 range over a two-and-half-month period. Investors have been concerned about how the shares would fare after expiration of the lock-up period.

According to Mark To, head of research at Wing Fung financial group, it is difficult to accurately estimate the value of the business, and high-tech names are often the victims of speculative trading.

Source: Nikkei Asian Review