The smartphone giant Xiaomi Corp. it became the latest target technology group of the Trump administration, with its surprise added to the U.S. blacklist of investments that drove its shares down sharply.
The addition of analysts and investors wrong foot Xiaomi. Xiaomi, a consumer electronics company that focuses on mobile phones and home appliances, had managed to avoid U.S. pressure even as Washington tightened the screws on Chinese technology groups, including Huawei Technologies Co.
Xiaomi’s shares have more than doubled in the last twelve months and the company has quickly gained market share. In the third quarter of 2020, it surpassed Apple Inc. to become the third largest smartphone maker in the world, according to Gartner.
On Thursday, the U.S. Department of Defense added Xiaomi to a list of companies it says support the Chinese military. Under the terms of an executive order issued by President Trump, the designation means that after 60 days, U.S. investors will not be able to buy shares in Xiaomi and have one year to sell the existing shares.
Shares of shares traded in Hong Kong by Xiaomi fell nearly 14% on Friday before closing 10% lower.