Xiaomi decided to lower its ambitious IPO valuation target by at least $20 billion, The Wall Street Journal reports, citing sources with knowledge of the development. The Beijing-based technology company that's considered to be one of the world's most valuable startups has reportedly been deliberating a $100 billion valuation for at least several months before settling for a less optimistic figure. The firm filed for an initial public offering last Thursday and while numerous industry sources cited the $100 billion figure on that occasion as well, the filing itself did not reveal Xiaomi's target. According to the latest information, the company is now aiming for a figure that may be as much as $30 billion lower, though the primary goal of its move to enter the public markets — raising cash — remains unchanged.
Xiaomi is hence still looking to raise some $10 billion in cash with its IPO, insiders claim, adding that the original equipment manufacturer concluded its original valuation target was too unrealistic given how the timing of the listing itself is inopportune for highly optimistic floats in the sector; over the course of the last several months, most major, publicly traded technology companies on the planet saw their shares decline. Being the world's fourth-largest smartphone vendor after Samsung, Apple, and Huawei, in addition to offering consumer products and services in a wide variety of other segments, Xiaomi is still likely to gather significant attention from investors and enjoy a successful IPO, many industry watchers believe.
No official timeline has yet been attached to Xiaomi's IPO but as the company has yet to even announce roadshow plans and has only filed preliminary paperwork last week, its public listing is unlikely to be held before July. The startup recently vowed to never exceed a five-percent profit margin on all of its hardware products combined as part of a move that many interpreted as a publicity stunt and an unofficial start of Xiaomi's roadshow seeing how its hardware unit is presently nowhere near as profitable and the pledge itself hasn't included the company's software business.