A customer holds a branded shopping bag inside a Xiaomi Corp. store (Photographer: Christophe Morin/Bloomberg)

Xiaomi IPO Could Value Smartphone Giant at Half Its Initial Goal

(Bloomberg) -- Xiaomi Corp.’s highly-anticipated Hong Kong initial public offering could value the Chinese smartphone giant at as little as $53.9 billion, roughly half its initial goal.

Beijing-based Xiaomi started marketing the deal to investors Thursday, touting cornerstone investments from U.S. wireless-chip giant Qualcomm Inc. and SF Holding Co., the Chinese equivalent of FedEx Corp. The company and existing investors are offering 2.18 billion shares at HK$17 to HK$22 apiece.

The price range values Xiaomi, once the world’s most valuable startup, at $53.9 billion to $69.8 billion, according to terms for the deal obtained by Bloomberg. That could rise to as much as $70.3 billion if a so-called over-allotment option is exercised.

Top executives at Xiaomi were initially pushing for an IPO valuation of as much as $100 billion when they began preparations for the listing last year, Bloomberg News reported at the time. The tussle over valuation stems partly from mixed messages about what Xiaomi does.

While 70 percent of revenue comes from selling smartphones, co-founder Lei Jun insists that Xiaomi’s real goal is to be an internet services company making money off ads and online games.

©2018 Bloomberg L.P.