(Yicai Global) Jan. 18 -- Chinese handset and home appliance giant Xiaomi has risen today as the firm completed its first share repurchase program. The stock has halved its value since a flotation a bit more than six months ago.
Xiaomi purchased 6.1 million ordinary shares on the open market for an average price of HKD9.76 (USD1.24) per share on Jan. 17, the Beijing-based firm said in a statement to the Hong Kong Exchanges and Clearing today.
Xiaomi's share price [HKG:1810] remained strong after opening high today, and closed at HKD10.14 with a surge of 4.11 percent.
The company aims to show full confidence in the current and long-term business prospects via the program, and the business strategy will create value for shareholders, the firm added.
One reason for the decline is that Jan. 9 marked the first day when the lock-up period ended and staff members and early investors -- which had 3 billion shares, or 19 percent of all equity -- could start selling.
The company's controlling shareholders, namely founder Lei Jun, Smart Mobile Holdings and Smart Player, promised not to sell their shares in the next 365 days, the firm said in a statement on Jan. 9. These shareholders have more than 31 percent of all equity.
Xiaomi was listed in Hong Kong on July 9 last year. The initial price was HKD17 per share. Hong Kong billionaire Li Ka-shing, Jack Ma, and Pony Ma have invested in the company before the initial public offering.
The stock price rose to a pivot of HKD22.2 on July 18. On Jan. 10, the share slumped to its lowest of HKD9.44, a 57 percent decrease from its highest peak. The company's market value decreased by about HKD300 billion (USD38.2 billion) during the six months.
Chief Executive Lei once reached a wealth of USD19.2 billion when the stock price was at a historical high, ranking sixth on the Forbes China Rich List.
After Xiaomi's successful IPO, Lei promised at the company's celebration conference to make investors who buy Xiaomi stocks on the first day of trading double their money.
Editor: Emmi Laine