(Bloomberg) -- Meitu Inc. fell in Hong Kong after MSCI Inc. reversed course and decided not to include the maker of China’s most popular beauty-enhancing selfie app in its global indexes.
The index provider on Wednesday announced the reversal on its website, without giving a reason, just a day after making it. Societe Generale SA analysts had called the decision to include Meitu a surprise. The shares dropped 9.1 percent to HK$9.80 at the close of Wednesday’s trading.
Since its market debut in December, much of Meitu’s stock has been held by a small group of investors, including those who backed the company before its initial public offering. The five biggest shareholders control 56 percent of its shares, according to data compiled by Bloomberg, and it has yet to post a profit since the listing.
“Taking into account the 180 days lock-up period for pre-IPO investors of Meitu, MSCI confirmed that the company was no longer eligible for inclusion,” MSCI said in an emailed statement after the markets closed on Wednesday. “The company did not meet the global minimum foreign inclusion factor requirement after the lock-up adjustment.”
Trading in Meitu has been marked by wild swings since the company went public. On March 20, the stock rose as much as 28 percent over the course of the day before tumbling in late trade to close 11 percent lower. The shares can be traded via Hong Kong’s stock-trading links with exchanges in Shanghai and Shenzhen.
The IPO raised $629 million in what was the city’s largest technology IPO in almost a decade. Meitu shares have fallen 46 percent since reaching a record close of HK$18 on March 17.