JPMorgan Cuts MiniMax Price Target by Another 20%, Stock Drops Over 18%
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JPMorgan slashed MiniMax's target price for the second time in a week — a cumulative cut of nearly 40% — sending shares down over 18% intraday Monday, now more than 80% below their March peak, as dilution risk from a massive fundraise collides with post-IPO lock-up expiry.
Why did JPMorgan cut twice in one week?
The first cut came last week: target price down 25%. The second followed Sunday: another 20% off.
The trigger was MiniMax's fundraising plan — up to HK$20 billion via new shares plus convertible bonds.
This means → analysts see the raise as solving the cash problem but creating a new one: significant equity dilution.
How is the HK$20 billion raised, and how big is the dilution?
The raise has two parts: HK$9.5 billion from new share issuance + HK$6.5 billion from zero-coupon convertible bonds — debt that pays no interest and can convert into stock at maturity.
If the convertibles convert in full, the two tranches together would dilute total share count by roughly 17%.
In plain terms = if you owned 1 share out of 100 before, you'd own about 1 out of 117 after — each share's claim on the company shrinks.
JPMorgan's own words: "The US$2 billion raise removes the compute-resource constraint, but the two sides of the trade are asymmetric in timing and certainty."
What else is weighing on the stock?
Beyond dilution, MiniMax faces a second headwind: key investors who entered at IPO recently cleared their six-month lock-up period, freeing those shares for sale.
This means → early backers can finally exit, and with the stock already down over 80% from its peak, some choosing to cut losses is unsurprising.
The two negatives stacked — dilution expectations plus lock-up selling pressure — have driven three consecutive trading days of declines.
What does this mean for investors?
JPMorgan's assessment is blunt: the raise solves MiniMax's compute bottleneck, but near-term financial gains must be weighed against equity dilution.
In plain terms = the money is secured, but the cost is thinner value per share — and revenue growth hasn't yet caught up to fill the gap.
This reflects a deeper tension: AI startups struggle to burn cash for compute capacity and protect shareholder value at the same time.
Content is for reference only, not financial advice.