Zhipu AI's Free Float Remains Just 8% After Fundraising, Low Float Risk Persists
Claire Weston
Zhipu AI priced a $4 billion share placement at HK$1,588 per share, sending the stock up as much as 22% intraday — yet the effective free float sits at roughly 8% post-deal, keeping the low-liquidity structure intact until at least January next year as a valuation debate intensifies.
It just raised $4 billion — why is the float still so thin?
Zhipu AI issued 19.8 million new shares and unlocked roughly 26 million more this week — seemingly a large supply injection.
But cornerstone investors have pledged to hold, so very few shares actually reach the open market.
This means → effective free float is only about 8%, according to Ravi Wong, first vice-president at Yin Wan Family Office (Hong Kong). The stock remains a low-float name.
What does an 8% float mean for investors?
In plain terms = so few shares trade freely that any single large order can move the price sharply.
Wong says "price volatility and sensitivity to large institutional trades will stay elevated."
This reflects the deeper reason the stock has rallied 1,650% since its January listing — and is the most volatile Asian-listed equity above $4.5 billion in market cap tracked by Bloomberg.
When will the low-float condition change?
The earliest inflection is January next year, when another roughly 40% of outstanding shares unlock.
For comparison, rival MiniMax already has a free float of about 70% post-lockup (HSBC estimate) and plans to raise up to HK$14.4 billion more via new shares and convertible bonds.
This means → until the unlock, Zhipu AI's price will remain dominated by its thin float; after the unlock, the stock faces a supply test.
What is the bull case?
JPMorgan raised its target price from HK$1,800 to HK$2,000, citing strong AI-model competitiveness and global expansion potential.
Zhipu AI's most advanced model ranks highest among Chinese companies on the Artificial Analysis AI index, trailing only Anthropic, xAI, and OpenAI globally.
Gavekal Capital portfolio manager Leonid Mironov notes the valuation is far above peers but remains bullish, saying "the models have received good reviews."
What is the bear case?
Revenue doubled last year to RMB 724.3 million, but the net loss widened to RMB 4.7 billion — worse than analysts expected.
On an annual recurring-revenue basis, the stock trades at roughly 90× revenue, versus about 20× for Anthropic.
Pegasus Fund Managers managing director Paul Pong says: "It is hard to justify the valuation at this level, because much of the rally is sentiment-driven and amplified by the extremely low float."
He adds that cornerstone investors can sell at any time, creating "significant uncertainty or potential pressure" on the share price.
Why is the January unlock the make-or-break moment?
Roughly 40% of shares will unlock, sharply expanding the tradeable supply and potentially eroding the low-float premium.
In plain terms = if the price holds once liquidity is plentiful, the market genuinely endorses the valuation; if it doesn't, the prior rally was largely a float illusion.
Zhipu AI is also pursuing a Shanghai listing — if it proceeds, supply increases further. A dual listing plus the unlock makes the first half of next year the real stress test for the current valuation.
Content is for reference only, not financial advice.