Key Takeaways:
CaoCao shares lost 37% of their value over six trading days this month, as a post-IPO lockup period for the company's institutional investors gets set to expire
The operator of China's second largest ride-hailing platform scrambled to contain the damage by saying its operations remain on track
Just six months after zooming onto the Hong Kong Stock Exchange, shares of ride-hailing platform CaoCao Inc. (2643.HK) are hitting some major speed bumps.
Earlier this month, CEO Gong Xin confidently unveiled a "100 billion yuan from 100 cities in one decade" roadmap at a robotaxi event, discussing his company's ambitious plans to create a massive fleet of autonomous taxis. The 10-year vision he described included CaoCao's establishment of five global operation centers offering service in 100 cities, and generating cumulative gross transaction value (GTV) of 100 billion yuan ($14.2 billion).
But investors were apparently unconvinced by such grand visions. Just days later, CaoCao's stock suddenly collapsed, plunging for six consecutive days from HK$52.30 to HK$32.80, a 37% nosedive that wiped out more than HK$10 billion ($1.3 billion) in market value.
As the stock tumbled, the company quickly stepped in to try and stem the bloodletting. On Dec. 15, it issued a statement insisting business operations were normal and its fundamentals remained sound. It emphasized its core ride-hailing segment's robust growth was in line with management expectations, while asserting its medium- to long-term robotaxi strategy was progressing as planned. It also noted steady advancement in its international roadmap as it explored overseas opportunities.
But those reassurances did little to stem the selling tide. That led CaoCao to issue another announcement the next day, disclosing that 19 members of its management team had pledged not to sell their shares that vested under incentive plans before June 24 next year.
Only then did the ...
