Hong Kong IPO Lock-Up Expiry Wave May Trigger Selling Pressure; Hao Hong Warns of Manipulation Risks
0xBroomberg
Lotus Asset Management CIO Hao Hong warns that many recent Hong Kong IPOs have very small free floats, making them vulnerable to price manipulation — and that concentrated lock-up expiries could hit share prices hard.
Hong Kong IPOs are booming — so what's the risk?
Hao Hong expects the strong IPO momentum to continue, but flags a structural problem: many newly listed stocks have unusually small free floats.
This means → very few shares are actually available for open trading; a small amount of money can move the price dramatically.
In plain terms = a thin float makes manipulation easy — Hao Hong says these stocks are "vulnerable to price manipulation."
What happens when the lock-ups expire?
When a company goes public, its founders and early investors are typically barred from selling for a lock-up period — a set window after listing.
Once that window closes, those locked-up shares flood the market at once. If there aren't enough buyers, prices drop.
This reflects a timing mismatch: IPO sentiment is high at listing, but the market may not have the depth to absorb selling when lock-ups expire months later.
What should investors watch?
Hao Hong's key message: the specific unlock schedule for each batch of new listings is the critical variable for gauging future selling pressure.
This means → not all IPOs unlock on the same day; they expire in waves — which batch comes first, and how large it is, determines when and where pressure concentrates.
In plain terms = to sidestep this risk, check the unlock calendar for the IPO stocks you hold.
Content is for reference only, not financial advice.