Billionaire Professor Lost More Than $2 Billion In One Day As Shares Dive On Lockup Expiration

Asia Billionaire Professor Lost More Than $2 Billion In One Day As Shares Dive On Lockup Expiration Yue Wang Senior Contributor Opinions expressed by Forbes Contributors are their own. I write about interesting Chinese companies. New! Follow this author to improve your content experience.

Got it! Jun 30, 2022, 08:20am EDT | Share to Facebook Share to Twitter Share to Linkedin SenseTime cofounder Tang Xiao’ou. VIVEK PRAKASH/BLOOMBERG Tang Xiao’ou, the billionaire professor behind Chinese artificial intelligence giant SenseTime, saw his wealth plunge by $2. 4 billion in just one day, as shares in his Hong Kong-listed company dove as much as 51% after a lockup period ended on Thursday.

The 54-year-old now has a net worth of $3 billion, which is based on his ownership of 6,906. 1 million class A shares in the company. A lock-up on a portion of SenseTime’s class B shares, including those owned by cornerstone investors, has expired today.

But the A shares owned by founder Tang, who is an executive director and the company’s largest shareholder, are still subject to selling restrictions. SenseTime’s key management announced that they are voluntarily extending a lock-up of their class B shares owned to Dec. 29.

Chief Executive Xu Li, chief scientist Wang Xiaogang and co-founder Xu Bing said in a filing to the Hong Kong Stock exchange that this decision was undertaken “in order to express their confidence in the long term value and prospect of the group. ” For now, the lock-up on Tang’s A shares will also end on Dec. 29.

Investors, however, appear to be taking a less favorable view. SenseTime initially surged following its debut in Hong Kong, raising $740 million after its listing plans were postponed due to the company’s placement on a U. S blacklist, which prohibits Americans from investing in the firm.

It then reached a high of HK$9. 7 per share on Jan. 4, up more than two fold from its initial public offering price of HK$3.

85 apiece, giving Tang a peak fortune of $8. 6 billion. Yet the professor, who still teaches courses such as computer vision and video processing at the Chinese University of Hong Kong, has now lost almost 70% of the amount.

SenseTime’s shares have been going down because investors are reassessing the company’s profit prospects, says Shen Meng, director of Beijing-based boutique investment bank Chanson & Co. MORE FOR YOU China Detains Fallen HNA Ex-Billionaire Chairman Ahead Of Airline Restructuring Vote Nasdaq Listing Of Freshworks Creates Windfall For Indian Founder And Hundreds Of Employees Ninja Van Becomes Singapore’s Newest Unicorn After Raising $578 Million From Alibaba, B Capital “Previous market valuations had been too high,” Shen says. “SenseTime’s R&D is geared towards so-called core technologies.

But there are a lot of uncertainties and it will take quite some time for the spending to generate actual profit. ” A SenseTime spokesperson declined to comment on the company’s stock market performance. It generated 4.

7 billion yuan ($702 million) in revenues last year, up $36. 4% from 2020, as the company sold more of its AI-based software to the Chinese government as well as private enterprises. But losses attributable to shareholders also jumped more than 40% to $2.

6 billion. In its annual report, the company blamed this on fair value losses of preferred shares as well as rising research costs, which stood at $457 million, or about 65% of last year’s total sales. It pledged in the annual report to maintain “industry-leading level of R&D investment” this year.

SenseTime’s research team already consists of 4,274 people, accounting for 70% of its total employee count. Yue Wang Editorial Standards Print Reprints & Permissions.