Monday Tech Briefing: Xiaomi Spends $12.6 Million on Second Stock Buyback
Chinese smartphone maker Xiaomi has repurchased its own shares to boost its share price for the second time in a week. Xiaomi announced Monday that it bought 9.85 million shares on Friday for around HK$100 million ($12.7 million).
The company made its first stock buyback on Thursday when it bought 6.14 million shares worth HK$55.94 million. Xiaomi is facing a stock sell-off after a six-month lockup ended on Jan. 9, allowing early investors of Xiaomi to sell their shares for the first time.
Xiaomi’s Hong Kong debut in July was one of the world’s most-hyped initial public offerings in recent years, with bankers initially touting a valuation of as much as $100 billion. However, Xiaomi’s market capitalization has dropped to about $30 billion from a high of $61 billion reached after its listing. (Official announcement, link in Chinese)
Ren Zhengfei, the founder of Chinese telecom-equipment supplier Huawei Technologies Co., warned in two emails sent to Huawei employees on Friday that they should prepare for “times of hardship.”
In order to lower costs, Huawei will need to lay off some workers and stop projects that don’t yield value for the company, Ren said.
The emails come at a time when Huawei faces increasing global scrutiny. U.S. federal prosecutors are now pursuing criminal charges against Huawei on accusations of stealing trade secrets, The Wall Street Journal reported Wednesday. (Caixin, link in Chinese)
China’s tech industry has been rattled by dwindling capital, volatile markets and tightening regulations since the second half of 2018.
Leading industry players, including Alibaba, JD.com, Tencent, Baidu and Xiaomi, have unveiled restructuring plans involving job cuts.
The economic slowdown, along with China’s graying population, makes it harder for internet companies to maintain their main revenue growth from advertising while finding new users, analysts said. Moreover, raising capital is becoming increasingly challenging for startups as investors are more hesitant to pour their money into the cash-burning sector. (Caixin)
Chinese group-buying platform Pinduoduo Inc. confirmed Sunday that people had exploited a loophole on its platform to “steal” online discount vouchers.
The loophole, discovered early Sunday morning, allowed some Pinduoduo users to get free vouchers worth 100 yuan ($15) each. The users who discovered this bug then spread the word on Chinese social networks, prompting more people to claim the vouchers.
Pinduoduo said in its statement that the vouchers “stolen” were worth tens of millions of yuan in total. The company said it has fixed the bug and reported the incident to the police. (Reuters)
Apple supplier Foxconn Technology Group was unable to create enough jobs at its Wisconsin factory in 2018 to claim tax credits of up to $9.5 million.
The company was supposed to create 260 full-time jobs in 2018, but hired only 182 employees. Foxconn has been struggling to find qualified engineers locally.
In July 2018, Foxconn decided to invest $10 billion in a Wisconsin factory that would employ thousands of workers to make screens for devices. Wisconsin promised Foxconn around $4 billion in incentives if the company hired more than 2,080 employees by the end of 2019. (The Wall Street Journal)
DJI Technology Co. Ltd., the world’s largest manufacturer of consumer drones, has revealed a series of internal corruption cases that cost it 1 billion yuan in 2018.
A total of 45 employees were caught, 29 of whom were fired and the other 16 handed over to local law enforcement departments, the Shenzhen-based company said in an internal statement seen by Caixin.
Most of the fraud cases were linked to DJI’s supply chain management and procurement department, as employees took kickbacks from suppliers while others colluded with company researchers to grant favors to certain suppliers.
The fraud cases point to inadequate internal controls at the private Chinese company, which has been the world’s leader in consumer drone manufacturing for more than a decade. (Caixin)
Compiled by Zhang Erchi
Contact editor Teng Jing Xuan (firstname.lastname@example.org)
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