Xiaomi Co-Founder Unveils Major Share Sale Plan, Weighing on Sentiment

A significant insider filing has revealed a substantial future share disposal program by Xiaomi's Vice Chairman and co-founder, Lin Bin. The disclosure, made in late December, outlines intentions to sell up to $2 billion worth of the company's Class B shares, creating near-term pressure on the stock and raising concerns over potential future liquidity.

According to documents filed on December 28 and 29, the actual share sales are not scheduled to commence until December 2026. The plan establishes an annual cap of $500 million, designed to prevent large, disruptive block sales over any 12-month period. While this staggers the potential supply, the total cumulative volume remains notable. Xiaomi stated that the proceeds are earmarked for a new investment fund focused on emerging technologies, a detail that analysts note does not directly reflect on the company's near-term operational health.

Market Reaction and Analyst Outlook

The announcement has been perceived by the market as a psychological overhang, potentially capping upward momentum in the share price in the interim. The critical question is whether robust demand for new premium devices and increasing software platform monetization can counterbalance this sentiment.

In a separate development, Goldman Sachs adjusted its stance on Xiaomi on November 19, lowering its price target from HK$56.50 to HK$53.50 while maintaining a "Buy" recommendation. The investment bank cited rising component costs, particularly in memory, which could pressure margins. However, Goldman also highlighted strong operational performance, including an 81% year-on-year increase in adjusted net profit for the third quarter, driven by solid margins in the AIoT (Artificial Intelligence of Things) segment.

Should investors sell immediately? Or is it worth buying Xiaomi?

Product Pipeline and Software Developments

Amid these financial developments, Xiaomi continues to advance its product ecosystem. The company has begun the stable rollout of its HyperOS 3 to a new wave of devices, including models like the Redmi K60 series and the Xiaomi Pad 6 Pro. This update is based on Android 15 and introduces generative AI features, a revamped control center, and enhanced cross-device connectivity.

Furthermore, in late December, Xiaomi unveiled the Xiaomi 17 Ultra, a flagship smartphone aiming to compete in the premium photography segment with specialized zoom capabilities and a unique haptic feedback ring around the camera module.

Looking Ahead

The medium-term trajectory for Xiaomi's equity may hinge on its ability to generate substantial free cash flow from hardware sales and software services. Strong contributions here could diminish the relative impact of the planned share sales over time.

For now, investors are focusing on several concrete markers: the scheduled start of sales in December 2026, the annual disposal limit of $500 million, and the updated assessment from Goldman Sachs with a HK$53.50 price target and a "Buy" rating.