MiniMax's 400 Billion Valuation Lock: Unlock Date May Face "Bloodbath"

Author | Li Jia

Editor | Fang Kun

On March 18, Hong Kong stocks’ leading AI model company MiniMax’s stock price surged significantly, once rising over 28%, with a market capitalization surpassing HKD 400 billion, once again overtaking the 26-year-old internet giant Baidu.

In terms of news, MiniMax simultaneously announced the release of its M2.7 large model, marking its first model deeply involved in iterative development. Additionally, Tencent Cloud announced a formal partnership with MiniMax, focusing on full-chain collaboration around core scenarios of Agent RL (Reinforcement Learning for Intelligent Agents). Furthermore, the Hong Kong Stock Exchange recently approved MiniMax to remove certain markers related to uncommercialized companies (under Chapter 18C).

But such a crazy rise and hype may be a result that even MiniMax’s management team would prefer to avoid.

Beneath the dazzling halo, risks ignored by many investors are accumulating: MiniMax’s circulating shares account for only a small proportion of the total equity, while the majority of shares are set to be unlocked gradually.

According to relevant announcements during MiniMax’s listing, after the exercise of the greenshoe (over-allotment option), the total share capital expanded to 314 million shares. The global offering increased the total number of shares to about 34 million, with cornerstone investors subscribing to a total of 16.5 million shares, which cannot be traded before July 8, 2026. Subtracting the cornerstone lock-up, about 17 million shares remain as circulating shares, accounting for approximately 5.44%.

Circulating shares only 5% means that a small amount of buying can quickly push up the stock price. This extremely low circulation creates a man-made “scarcity.” Under severely limited supply, even small funds can drive the stock price to very high levels. On its first day of listing, the Hong Kong public offering portion saw an oversubscription of 1,837 times, illustrating market enthusiasm.

Historical experience shows that this “low circulation, high valuation” model often triggers intense market turbulence when the lock-up period ends.

For investors, the lesson from SenseTime is still fresh. Four years ago, SenseTime’s stock price halved on the lock-up day; four years later, will MiniMax repeat this scene? The answer lies in the company’s upcoming financial reports and in every investor’s risk awareness.

SenseTime’s Lesson: The “Big Escape” on Lock-up Day

On December 30, 2021, SenseTime Technology listed in Hong Kong, also adopting a low-percentage issuance strategy. During IPO, SenseTime issued only about 5% of its total shares, resulting in very limited free float. After listing, its market cap once exceeded HKD 300 billion.

However, the feast ended abruptly six months later. On June 30, 2022, SenseTime faced its first lock-up expiry, with about 23.3 billion shares held by pre-IPO investors and cornerstone investors becoming tradable. The free float share proportion surged to about 60%.

SenseTime’s case shows that when a large portion of restricted shares are unlocked simultaneously, the market’s capacity to absorb them is limited. If fundamentals cannot support high valuations, stock prices tend to plummet under unlocking pressure.

The result was disastrous. On the lock-up day, SenseTime’s stock opened with a sharp decline, falling 46.77% for the day, with a market value evaporating over HKD 90 billion.

Why does the current MiniMax stock price not reasonably reflect market expectations for AI business prospects? Similarly, Alibaba, which is also all-in on AI in organization and business, has seen its stock decline over recent trading days.

The chart below, compiled by Tencent News, compares MiniMax with another internet giant Baidu. Even if MiniMax grows at 200% annually to reach Baidu’s revenue scale, that remains a distant future.

When the circulating share ratio is so low, stock prices can easily become distorted. Small amounts of capital can cause large fluctuations, but this does not reflect the company’s true value.

According to Caixin, about 107 million shares, or 34.25% of total shares, will be unlocked on July 9, 2026. Additionally, the 16.5 million shares held by cornerstone investors will also be unlocked. Based on a research report from Pudong International Securities, on July 9, 2026, MiniMax will have approximately 185 million shares unlocked, accounting for 79% of the current free float.

The scale of unlock in July may be lower than SenseTime’s at that time, but MiniMax’s current valuation (with a price-to-sales ratio exceeding 600) is far higher than SenseTime’s then.

The current HKD 400 billion market cap has instead become a “Damocles sword” hanging over MiniMax.

MiniMax’s high valuation is based on a core assumption: that the company will become a leading player in China’s AI large model field and secure a position in the global market. But whether this can be realized remains uncertain.

The AI large model race is fiercely competitive. Besides major overseas AI giants, listed companies like Zhipu AI, Moonlight, and others are accelerating R&D and commercialization. Meanwhile, internet giants such as ByteDance, Alibaba, Tencent, and Baidu are also investing heavily in large models.

“If market sentiment shifts or the company’s fundamentals fail to meet high growth expectations, these unlocked shares could exert enormous pressure on the stock price,” said a hedge fund manager focused on tech stocks to Chuangzhi Ji. “History doesn’t simply repeat, but the low float model does carry structural risks.”

A price-to-sales ratio over 600 indicates the market must have extremely high expectations for MiniMax’s future growth. However, the pace of technological iteration in AI is rapid; today’s leader may not be tomorrow’s winner. If performance growth falls short of expectations, such high valuations will be unsustainable.

How should investors respond to the unlocking wave?

Facing the upcoming unlocks, MiniMax investors need to consider several scenarios:

Scenario 1: Good market reception, stable transition. This depends on MiniMax demonstrating strong business growth before unlock and overall market sentiment remaining optimistic. If the company continues to outperform expectations, new investors may be willing to absorb the unlocked shares, keeping volatility manageable.

Scenario 2: Partial sell-offs trigger chain reactions. If early investors choose to cash out after unlock and market absorption is insufficient, the stock could face downward pressure. Given MiniMax’s high valuation, even slight declines might trigger technical selling, creating a negative feedback loop.

Scenario 3: Severe correction similar to SenseTime. In extreme cases, if a large volume of unlocked shares is sold off en masse and market demand is lacking, the stock could experience a cliff-like plunge akin to SenseTime’s lock-up day. Although management might extend lock-up periods or take measures to stabilize the market, historical experience suggests such measures often only provide temporary relief.

In the long run, this will likely spark broader discussions on Hong Kong IPO issuance policies. While low float models can create “scarcity premiums” in the short term, they distort price discovery and increase market volatility over time. Investors should recognize that high stock prices do not necessarily equate to high value, especially when driven by supply shortages rather than genuine demand.

Conclusion

The moment MiniMax’s market cap surpasses Baidu’s symbolizes the rise of Chinese AI startups and reflects market frenzy and anxiety. However, once the feast ends and the lock-up period concludes, the true determinants of company value will be its technological strength, commercialization capability, and long-term competitiveness—not the scarcity created by limited float.

In the vast universe of AI, MiniMax may sail toward distant horizons. But before that, it must navigate the reefs of the unlocking storm.