ZTE back on stock market, investors take away $3 billion
ZTE has estimated that it lost more than $3 billion during the time it was under a US imports ban. It will have to pay a total of roughly $1.4 billion to get itself out of it. Now, the Chinese tech manufacturer has come back into contact with the world market.
After a two-month suspension of trade, ZTE shares in Hong Kong and Shenzhen have finally started to move again and investors took the opportunity to move $3 billion back into their pockets.
Reuters reports that a lot of the selling came from doubts on the company’s leadership. Part of the changes ZTE signed onto in order to be able to begin sourcing components from United States firms again was that it had to replace the boards of two of its controlling entities. It also has to hire a compliance monitor which will have, according to Zhongtai Securities, CEO- and board-level influence on many decisions. Add to this the fact that the US Congress is trying to prevent Defense Department contractors from selling product to ZTE and the future looks really scary for this company.
In Shenzhen, the stock price sank by the exchange’s daily limit of 10 percent before trading was halted. In Hong Kong, shares sank 40 percent from its last close in April.
The company had a market value of $20 billion before the ban took effect. It will reassess its first quarter earnings and will report on changes in the near future.