Shein's Hong Kong listing debut sours with 10% plunge after rocky IPO
(Bloomberg) -- Shein Global Holdings Ltd. struggled in its Hong Kong debut after a years-long process to an initial public offering that eventually valued the company at a fraction of what it was once worth and still left investors questioning its value as consumer play.
Shein Global Holdings faced a significant setback in its Hong Kong initial public offering (IPO) debut, with shares plummeting by 10% in early trading. The company's valuation plummeted to a fraction of its former worth, falling to HK$43.72 ($5.57) from the IPO price of HK$48.56. Despite recovering some of the losses, Shein's shares were met with heavy selling in the initial trading session.
The IPO, which raised HK$13.6 billion, valued the company at over $26 billion, a drop from its previous $100 billion valuation. This decline reflects mounting challenges for Shein, including rising tariffs, stricter regulations, and stiff competition from rivals such as PDD Holdings's Temu and Alibaba Group Holding's AliExpress.
With investors favoring AI and tech-related plays, Shein's traditional e-commerce business model, which relies heavily on price competition, appears to be less appealing. The company is among several Hong Kong listings that have underperformed in recent months, with three consecutive companies opening with a loss after raising over $1 billion.
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