Xiaomi's market cap

Xiaomi started trading on HK Stock Exchange on Monday.


As of today, the market cap is HKD$433B, roughly $55B. Excluding the $4.7B new money raised from this IPO, that's a valuation of about $50B.

I was surprised and not surprised by media calling the IPO a failure as it's half the $100B that Lei Jun had aimed at in the beginning. On the other hand, I think it's quite revealing that given last year's revenue at roughly $17B, the company is currently trading at about 3X the trailing revenue.


Yes, that magic number that haunted all hardware companies and drove (most lazy) VCs away from hardware investments. The market is currently seeing Xiaomi as a pure hardware company. It will take time to see if the market will buy into Lei Jun's "Xiaomi is an internet company" in the future.

On the other hand, Xiaomi had only raised $3.4B in its history before IPO. 

Capital Efficiency = $50B / $3.4B = 14.7 X

That's still very good. In fact, much better than many of the software unicorns that linger at around 2X~6X. And they are not even exited yet!

So, to conclude:

  1. Xiaomi's IPO is not a failure.
  2. I would say it's a success given so many naysayers. 
  3. No true investors invest based on media's coverage.
  4. If anything, one invests contrary to what media say.
  5. Keep calm and listen to your SONOS.

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