Lei Jun Sold and Bought 1 Billion Xiaomi Shares: Why?

Lei Jun

Xiaomi Group disclosed on the Hong Kong Stock Exchange that the company’s chairman Lei Jun recently sold and subscribed for 1 billion shares of Xiaomi Group at the same price.

In fact, this caused a lot of questions and concerns. But the explanation is that the Xiaomi Group previously used the old-for-new method for additional issuance. Lei Jun’s share change was a corresponding operation to cooperate with the additional issuance. And it did not involve any reduction or increase in his own shares.

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The new issuance process is that the major shareholder (Lei Jun) first sells the shares to the placee, and then the major shareholder (Lei Jun) subscribes for the same number of new shares from the company. And the final major shareholder (Lei Jun) holds the same number of shares.

At present, the Hong Kong Stock Exchange has also uploaded three sets of disclosure forms:

The first group is that on December 1, the relevant major shareholder (Lei Jun) signed a sale agreement, and the number of shares of the major shareholder (Lei Jun) has not changed (because the shares have not yet been settled);

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The second group was also on December 1, when the relevant major shareholder (Lei Jun) signed an agreement to subscribe 1 billion shares, and the number of major shareholders (Lei Jun) increased by 1 billion shares;

The third group settlement date is December 4. The number of shares of the major shareholder (Lei Jun) decreased by 1 billion shares. Thus, it returned to the original number of shares held before the transaction.

Xiaomi shares

Xiaomi has previously announced that it intends to place 1 billion shares on an old-to-new basis. At the same time, it intends to issue convertible bonds with an initial conversion price of HK$36.74. The two transactions involved a total of approximately US$4 billion.

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