Bilibili (BILI) stock price recovers after a sharp selloff in Chinese tech stocks

Shares of the Chinese video sharing company Bilibili (NASDAQ: BILI) soared over 4.5% Monday, the same day the company’s shares became available for trading in Hong Kong.

Fundamental analysis: Hong Kong listing

Last week, Bilibili secured $2.6 billion in its secondary listing, pricing its shares at 808 Hong Kong dollars (about $103) per unit. Bilibili’s stock plunged to an intraday low of 753 Hong Kong dollars, which is nearly 7% lower compared to the offer price. Still, the shares managed to recover some ground and ended the day roughly 1% lower at 800 Hong Kong dollars.

Bilibili and a few other Chinese companies that are listed both in the U.S. and China including Alibaba and Baidu are facing challenges amid the continued disputes between Washington and Beijing. The U.S. Securities and Exchange Commission (SEC) passed a new law last week that could de-list foreign companies that do not meet U.S. auditing standards. 

Just a few days before Bilibili’s debut in Hong Kong, other dual-listed companies have seen billions of dollars wiped off their market capitalizations in just several days. Furthermore, Chinese companies are also facing greater regulatory scrutiny back home after Beijing’s efforts to tighten its grip over tech giants, impacting investors’ sentiment towards these stocks.

Most of Bilibili’s revenue comes from mobile gaming and selling virtual gifts to users who can then give these gifts to their favorite content creators. Bilibili’s shares listed in the U.S. soared more than 300% over the past 12 months. 

Technical analysis: Up over 10% from lows

Bilibili stock price closed 4.59% yesterday to follow up on the positive performance in the final two days of the last week. Overall, shares of Bilibili are down nearly 20% in March after racing to print the all-time high at $157.66 in February. 

The correction wiped off over 50% of gains recorded since November last year. The pullback stopped around the $90 handle, where the 100-DMA is located. The price action is now attempting to reach the intra weekly resistance at $115.

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Summary

Shares of Bilibili closed the day 1% lower on its first day of trading following its secondary-listing in Hong Kong. In New York, shares continued to recover after a sharp selloff in Chinese tech stocks.