[10/29 Thursday China market] Is China’s AI bubble really over?
An independent exercise, not a statement by the video creator or verification of every claim in the video.
Capitalization of 1000 does not require 1000 of new cash on listing day
Assume a hypothetical IPO has post-listing capitalization of 1000 at the offer price, with newly offered shares representing 10% of post-listing shares. With no secondary sale or overallotment, investors pay gross offering proceeds of 1000×10%=100. If issuance costs are 5, the company receives net proceeds of 100-5=95. The remaining capitalization of 900 values existing shares rather than new cash paid on listing day. Nor must all 100 come from selling other stocks: separately examine new inflows, subscription refunds, replacement selling and trading restrictions.
Check for yourself
- Does the large quoted figure describe post-listing equity value, gross proceeds or net cash received by the company?
- What proportions are primary and secondary shares, and who receives each payment?
- Have temporary subscription deposits, final payments and lockup releases been distinguished?
Limits of application
These are arbitrary units, not actual figures for a Chinese IPO. The example assumes the same offer-price valuation basis and entirely primary offering shares. It cannot establish trading volume, net inflows, index inclusion or the size and direction of market impact, and does not guarantee declines after a large IPO.
- What to look for
- Distinguish mainland and Hong Kong technology markets and examine how large IPOs affect company financing and market allocation.
- Why it matters
- Align the denominators for capitalization, offering proceeds and tradable shares, and examine follow-on funding and investor confidence rather than inferring returns from technology or policy support alone.
Timeline
5 segmentsThe speakers interpret large IPOs as potentially absorbing funds from a smaller technology market and caution about issuance speed and subsequent supply. The exchange confirms CXMT’s STAR Market listing, but total capitalization is neither entirely new cash paid in nor immediately sellable supply; compare the offer fraction, primary and secondary shares, lockups and new inflows separately. Cambricon’s official listing date is 2020-07-20, contradicting the suggestion that it listed recently; coincident past weakness and IPOs do not establish a single cause or a repeatable duration of declines.