Xiaomi Poised to Become a Billionaire Factory With Hong Kong IPO

Xiaomi last week filed for a debut in Hong Kong that will value the company at $50 billion to $100 billion, according to Bloomberg.

Lei Jun, the chairman and CEO, is the biggest shareholder with a 31.4 percent stake, while his fellow founders control 27 percent of the company, according to the prospectus. While Lei and Lin Bin, Xiaomi’s president, are already billionaires, a $50 billion valuation would create three new billionaires.

A market value of $100 billion would see five of Lei and Lin’s co-founders reach that mark, an example of how rapidly the world’s second-biggest economy is forging the mega-wealthy. Among the world’s 500 richest people, there are 40 Chinese, the second most after the U.S., with a combined wealth of $464 billion. Just how big these fortunes will be may hinge in part on how many new shares are issued, with estimates of the public float ranging from 15 percent to 25 percent.

A $50 billion valuation with a 25 percent public float comprising only newly-issued shares would value Lei’s stake at $11.8 billion, while a $100 billion market cap with a 15 percent float would boost his stake value to $26.7 billion. That would also bring his total net worth to $28.3 billion, including investments in Kingsoft and YY, making Lei China’s fourth-richest person after Alibaba’s Jack Ma, Pony Ma of Tencent, and Hui Ka Yan, chairman of China Evergrande Group. If Lei and the others decide to sell some of their existing holdings in the offering, that could affect the final valuation.