ZTE Stock Recovering Even As US Lawmakers Push For New Ban

ZTE stock started recovering during Monday trading in China even as the company's prospects remain highly uncertain amid another push from U.S. lawmakers to reinstate the Commerce Department's denial order from April which Washington lifted last Friday. The firm's shares ended Monday trading in Shenzhen at the equivalent of $2.32, 17 percentage points up compared to last week. ZTE is now once again allowed to purchase and license American technologies, though the $1 billion penalty and other concessions it agreed to all proved to be a major setback for its global ambitions, as was the business it lost while being crippled by the Commerce Department's ban over the last three months.

The company is expecting to lose over $1 billion in the first half of the year due to the denial order, with its previous estimates placing its total losses caused by the denial order at over $3 billion. ZTE is now planning on looking for a new line of credit to cover its near-term losses, having recently signaled it may raise as much as $10 billion in the coming months. The company's wireless ambitions in the United States have also been effectively killed following the troubled episode that's now seemingly coming to an end, at least unless the U.S. House votes to support the Senate's amendment to the annual defense bill that would reinstate the ban with a supermajority vote. Despite a bipartisan push to put ZTE out of business on the part of some stateside lawmakers, President Trump still has many allies in the House and would be likely to veto the anti-ZTE amendment proposed several weeks back.

The Shenzhen-based manufacturer is still facing accusations of being a spying tool for Beijing or having a potential to become one, with those allegations being pushed even more fiercely than similar claims made about Huawei given how ZTE is majority-controlled by a state-owned entity despite being publicly traded and run for profit. Last week, the company ejected and replaced the entirety of its board and management as part of a new settlement with Washington meant to replace the 2017 one agreed following its violations of trade sanctions the U.S. placed on Iran and North Korea.

You May Like These
More Like This:
About the Author
2018/10/2018-10-23.jpg

Dominik Bosnjak

Head Editor
Dominik started at AndroidHeadlines in 2016 and is the Head Editor of the site today. He’s approaching his first full decade in the media industry, with his background being primarily in technology, gaming, and entertainment. These days, his focus is more on the political side of the tech game, as well as data privacy issues, with him looking at both of those through the prism of Android. Contact him at [email protected]
Android Headlines We Are Hiring Apply Now