Shares of China’s second-largest cellphone maker, Xiaomi Group, have dropped almost 40 percent in value since the company was blacklisted by the U.S. government in January, and its market value has now evaporated by more than HK$300 billion ($38.64 billion).
The value has now slumped to around HK$600 billion ($77.29 billion), a drop of more than HK$300 billion ($38.64 billion) since the beginning of this year.
Since the start of a new bull market in 2021, technology stocks have seen a sharp pullback, and Xiaomi is no exception. In addition, the cost of being blacklisted by the United States may have had a greater impact.
On Jan. 14, the Trump administration blacklisted Xiaomi and eight other firms as military-owned companies controlled by the Chinese Communist Party (CCP), requiring U.S. investors to divest their shares in blacklisted entities.
Global index publisher FTSE Russell announced on March 5 that it will remove Chinese companies such as Xiaomi from its global and Chinese indexes to comply with the U.S. executive order.
The S&P Dow Jones index will exclude Xiaomi before market opening on March 15.
The founder of Xiaomi, Lei Jun, announced that the company welcomed the ruling and that the designation of Xiaomi as a Communist Chinese military company was “arbitrary and capricious.”
Lei, a retired military man, is also an investor in GalaxySpace.