Chinese online entertainment platform Bilibili was worth $54bn two years ago, as Wall Street investors rushed to bet on the rising tech giant.
Today, the Nasdaq-listed group’s market capitalisation has fallen to about $6.5bn, a collapse that has brought forward debt repayments that threaten to sap its remaining cash, leading to drastic cost-cutting at the company.
Bilibili’s travails are symptomatic of broader problems across the Chinese tech scene. Overseas investors are selling shares even in profitable internet giants such as Tencent and Alibaba, while becoming reluctant to back the country’s most promising start-ups.
Venture capital giant Sequoia Capital last week became the latest group to bow to rising geopolitical tensions between Beijing and Washington, announcing a plan to split its China business into a separate entity.
Adding to the flight of foreign capital is an unsteady economic recovery which has deflated Chinese tech stocks that had briefly jumped on hopes for the country’s post-pandemic reopening. The downward trend has left employees and investors concerned that the depressed valuations for Chinese tech groups listed in New York and Hong Kong may be long-lasting.
“China is getting cancelled and the economy is a dumpster fire,” said a Hong Kong-based equity analyst. He noted that JPMorgan Chase’s controversial labelling of Chinese internet stocks as “uninvestable” last year now looked better judged.