Xiaomi Corp’s shares rose as much as 12% in Hong Kong on Monday to hit the biggest intraday gain in almost a month. According to Bloomberg, the shares surged after the U.S court blocked the defense Department from restricting American investment in the Chinese smartphone giant.
- Xiaomi was on a list of companies with alleged links to the Chinese military, and financial restrictions against it were set to go into effect next week.
- The U.S. District Judge Rudolph Contreras issued a temporary halt on the ban against Xiaomi in a lawsuit the company argued the move was ‘arbitrary and capricious.”
- Xiaomi also alleged the ban by the U.S Defense Department deprived the company of its due process rights.
- Contreras said Xiaomi was likely to win a full reversal of the ban as the litigation unfolds and issued an initial injunction to prevent the company from ‘irreparable harm.”
- Xiaomi faced the prospect of being delisted from U.S exchanges and deleted from global benchmark indexes, wiping out as much as $44 billion from its market value following the ban.
- Xiaomi plans to continue to request that the court declare its connection to the military unlawful and permanently remove the designation.
Analysts point out that Xiaomi’s potential win could increase the chances that many of Trump’s sanctions on Chinese companies may have to be reversed.
Xiaomi stock is currently gaining. 1810: HKG is up 7.03%