Just after being "blocked" by the US government, Xiaomi ushered in a big reversal!
According to Bloomberg News, on the 12th local time, a US federal judge issued a preliminary injunction order against Xiaomi’s prosecution of the US Department of Defense, prohibiting the US Department of Defense from listing Xiaomi as a so-called "Chinese military-related enterprise" policy to take effect or implement.
According to the report, the judge of the U.S. District Court for the District of Columbia believes that the move by the U.S. Department of Defense is "arbitrary and capricious" and deprives the company of its legitimate legal rights.
He also said that as the lawsuit unfolds, Xiaomi is likely to win a full revocation of the injunction and issue a preliminary injunction to prevent the company from suffering "irreparable damage."
Prior to the trial, a legal document submitted by the US Department of Defense showed that the reason why the US blacklisted Xiaomi Group was partly because the group’s president and CEO Lei Jun was commended by the Chinese government in 2019.
Xiaomi responded that it was very pleased
In response to the preliminary judgment made by the US court, Xiaomi responded that it was an arbitrary and arbitrary decision to include Xiaomi on the list of Chinese military-related companies, and the judge also agreed with it. Xiaomi is very pleased that the court has made the above decision.
The following is the media statement on the court's decision on March 12, 2020:
Xiaomi was very pleased to see that on March 12, Eastern Time, the court formally prohibited Xiaomi from being recognized as a Chinese military-related enterprise and stopped the restrictions imposed by Executive Order 13959 on Xiaomi. The court passed an injunction to lift the restrictions on American investors to buy and hold Xiaomi stocks and cancel the mandatory sale of Xiaomi stocks, and the ban took effect immediately.
We would like to emphasize once again that Xiaomi is a listed company with independent management and decentralized equity and publicly traded stocks. The electronic products we produce are for ordinary consumers.
We believe that adding Xiaomi to the list of Chinese military-related enterprises is an arbitrary and arbitrary decision, and the judge also agreed with it. We will continue to request the court to finally rule that the decree is invalid for Xiaomi.
Xiaomi is a young and energetic technology company. Over the years, we have provided consumers all over the world with smart phones, smart TVs and many other touching and affordable consumer electronics products. We are willing to continue to work together with global partners so that everyone in the world can enjoy the beautiful life brought about by technology.
MSCI: Xiaomi will not be excluded from the index for the time being
After the court made the above-mentioned ruling, MSCI stated that it will not exclude Xiaomi B shares from the MSCI ACWI or MSCI China All-Share Index and related non-market capitalization weighted indexes or customized indexes. Before making this decision, the court agreed to grant Xiaomi a preliminary injunction related to US Executive Order 13959.
MSCI said it will continue to pay attention to the follow-up development of Xiaomi.
S&P Global Ratings announced on its official website on March 11 that Xiaomi will be removed from the S&P Dow Jones Indices before the market opens on March 15.
FTSE Russell said on March 5 that according to an earlier US Presidential Executive Order, Xiaomi will be removed from the FTSE Global All Cap Index and the FTSE Global A-Share Index Series from March 12. (FTSE Global China A Inclusion Indexes).
As of press time, neither S&P Global Ratings nor FTSE Russell has revised this previous decision.
The stock price has fallen by more than 30%, and the total market value has evaporated by 260 billion
Since the US Department of Defense blacklisted Xiaomi on January 14 this year, Xiaomi’s stock price has fallen by more than 11% that day. Then the stock price continued to weaken. As of March 12, Xiaomi's stock price has fallen by more than 30%, and the total market value has evaporated by 260 billion.
Prior to this, in 2020, Xiaomi's stock price once tripled, and its market value once exceeded 900 billion.
On the evening of the 11th, Xiaomi Group issued an announcement showing that the resolution exercised the general share repurchase authorization granted on June 23 last year. The number of shares repurchased should not exceed 10% of the total number of issued shares. The market buys back shares.
The board of directors of Xiaomi Group believes that “under the current situation, the share repurchase can show that the company is confident in its own business prospects and prospects, and will ultimately benefit the company and create value for shareholders. The company’s existing financial resources are sufficient to support the share purchase While maintaining a stable financial position. With the continuous and vigorous advancement of the mobile phone X AIoT strategy, the company expresses its confidence in the current and long-term business prospects through share repurchases."
Affected by this news, in the early trading on the 12th, Xiaomi's share price once soared nearly 10%, and its market value once exceeded 600 billion. However, as Hong Kong stocks dived in late trading, Xiaomi's gains narrowed to 4.12%, and its total market value fell to 573.3 billion yuan.
The whole story of Xiaomi being "blocked" by the United States
On January 14, local time, six days before the end of the term, the Trump administration of the United States added a number of companies to the list of the US Department of Defense. Previously, this list included companies such as Huawei, DJI, and SMIC.
According to this ban, US investors must divest their shares in the listed companies before November 11, 2021.
Xiaomi issued an announcement at that time, stating that it would take appropriate measures to protect the interests of the company and shareholders.
On January 31, Xiaomi issued an announcement stating that the US Department of Defense and the US Department of the Treasury had procedural unfairness and factual identification errors in their decision to include Xiaomi Group as a "Chinese military company" recognized by the NDAA, in order to protect Xiaomi's global users. , The interests of partners, employees, and shareholders require the court to declare that the above-mentioned decision is illegal and revoke the relevant decision.
On March 6, the “Wall Street Journal” reported that a recent legal document of the US Department of Defense showed that the reason why the US blacklisted Xiaomi Group was partly because the group’s president and CEO Lei Jun had been Commendation from the Chinese government.
The US Department of Defense claims in this document that the US Department of Defense believes that the Ministry of Industry and Information Technology is responsible for implementing the "military-civilian integration" policy. At the same time, considering this commendation and Xiaomi's "ambitious investment plan" in advanced technologies such as 5G and artificial intelligence, the US Department of Defense has good reasons to include Xiaomi Group on its "military-related blacklist."
On March 12, a federal judge in the District of Columbia issued a preliminary injunction order against Xiaomi’s suing the US Department of Defense, prohibiting the US Department of Defense from listing Xiaomi as a so-called “company related to the Chinese military” from the effective or implementation of the policy.
