After shares of an Artificial Intelligence giant Sense Time Group Inc took a dive of as much as 51%, the Co-Founder of the group lost almost half of his fortune, this Thursday.
Massachusetts Institute of Technology graduate and information engineering professor at the Chinese University of Hong Kong, Tang Xiao’ou owned a 21% stake in the company. His net worth plunged from about US $2.3 Billion to the US $2.9 billion.
The incident resulted in him being dropped off a list of the world’s 500 richest people, according to the Bloomberg Billionaires Index.
The fall occurred after the lock-up period on a portion of shares held by cornerstone investors and stakeholders expired a day earlier. Some executives, including CEO Xu Li, pledged to extend the lock-up of their shares until Dec 29.
A lock-up on a portion of the stock owned by cornerstone investors and shareholders — amounting to 23.4 billion shares — expired on Wednesday.
Thursday’s dive dragged the stock below the IPO price for the first time, the tech company completed a Hong Kong listing in December despite US sanctions and surged as much as 23% on debut.
SenseTime reported revenue of 4.7 billion yuan (RM3.1 billion) and a loss of 6.9 billion yuan last year.
SenseTime’s technology is used in various areas, including assisting police in China, providing product placements in films, and creating an augmented reality scene in a mobile game by Tencent Holdings Ltd.
Senior Analyst with Union Bancaire Privée Vey-Sern Ling said “SenseTime’s average liquidity looks very low, and it’s also subject to US sanctions. That means its investor base is probably more concentrated, so the impact of lockup expiry is higher,”
A Redex Research analyst Kirk Boodry estimated that SenseTime’s plummet takes the on-paper loss for SoftBank’s Vision Fund, which holds about 4.7 billion shares, to about $1.5 billion in a single day.
Deutsche Bank Predicts Bitcoin Price to return to $28,000 by Year-End