SenseTime saw its share soar on the first day of its listing on the Hong Kong Stock Exchange. During the first hours of this inaugural session, it gained more than 23%, to $ 4.74.
Junk in the United States, SenseTime had a promising start in China on the stock market. Indeed, the Chinese facial recognition specialist saw its share soar on the first day of its listing on the Hong Kong Stock Exchange. In the early hours of that inaugural session, it gained more than 23%, to $ 4.74, pushing the company’s capitalization up an additional $ 3.8 billion.
The title SenseTime finally ended this first session up 7.3% compared to its IPO price. This was set at $ 3.85 for the 1.5 billion securities introduced by the Chinese group, the bottom of the price range set for the operation. Initially, SenseTime intended to raise 767 million dollars on the occasion of its IPO in Hong Kong, scheduled for December 17. But the operation took a turn for the worse after the company was blacklisted by the United States in early December.
IPO postponed after SenseTime blacklisted in US
The US Department of the Treasury indeed accuses SenseTime of participating in the repression of the Uyghur minority in China. Specifically, the Office of Foreign Assets Control, the United States’ financial control body, estimates that SenseTime’s facial recognition technology has developed around an ability to “identify Uyghurs wearing beards, sunglasses and masks”For the benefit of the Chinese military-industrial complex. From then on, the organization imposed investment restrictions in SenseTime for banks and nationals from across the Atlantic. Bad news for the company, which is financially supported by American funds such as Tiger Global Management, Silver Lake and Qualcomm Ventures.
In this context, SenseTime preferred to postpone its IPO to December 30. The operation allowed the Chinese facial recognition specialist to raise $ 740 million out of a valuation of $ 16.4 billion. According to Bloomberg, SenseTime secured $ 512 million from nine institutional investors, including the Chinese state-owned Mixed-Ownership Reform Fund, before launching its IPO. Cornerstone shareholders, which are Chinese institutions, bought about 67% of the shares offered as part of SenseTime’s IPO, up from 58% in the original draft, before the US banned funds Americans to participate in the operation.
The doors of Wall Street soon closed to the Chinese giants?
Against the backdrop of Sino-American tensions, China, which has operated a spectacular takeover of its digital sector, would consider prohibiting its technological giants from raising funds in the United States, and therefore from going public on Wall Street, according to the Wall Street Journal. Beijing had also viewed with a very negative view the IPO of Didi, which had allowed the Chinese leader of VTC to raise 4.4 billion dollars last July.
Faced with pressure from the Communist regime, the company finally decided in early December to withdraw from Wall Street, where it was listed on the Nasdaq. This withdrawal could mark the end of a good period for the Chinese giants on the American stock markets. As a ripple effect, the IPOs of technology companies that are the pride of China should multiply in Hong Kong, which will no longer be neglected in favor of New York.