9/28/2016 Update: Xiaomi has just introduced into the Chinese marketplace its two newest phones (the Mi 5S and Mi 5S Plus). Impressive technology includes dual cameras in the larger phone and under the glass ultrasonic fingerprint recognition for the smaller model. These phone will only be available in China and start around $300 which is considerably less than similar offerings from Apple and Samsung.
Xiaomi has yet to start selling any of its products in the USA but will reportedly bring its new set top box (Mi Box) to US retailers sometime in October 2016. The Mi Box will be similar to the Apple TV and Roku but it will run on Android. There is still no news about any future Xiaomi IPO so investors will have to wait until 2017 or later to buy its stock.
Can I buy Xiaomi stock? Is Xiaomi a public company? When will there be an IPO? These are some of the questions you might be asking after hearing Xiaomi in the news so much. But right now it is a private company and you cannot buy its stock. On March 21, 2016 Hugo Barra (global vice president) stated that the company is financially stable on its own and has no immediate plans to raise capital or have an IPO.
Xiaomi gets a lot of media attention because it is said it copies Apple. It mainly sells cell phones, fitness bands, tablets, TV’s, and headphones at prices that are much lower than the premium devices from other companies. Xiaomi is a Chinese company based out of Beijing that mainly sells within China but it is starting to branch out into the rest of the world. As of early 2016, it has yet to bring any of its products to the United States but has big goals for expansion according to founder Lei Jun.
How To Buy Xiaomi Stock At The IPO
Being a Chinese company, Xiaomi may try to list on the Shanghai Stock Exchange when the time comes for it to have an IPO. Or it might go the route of Alibaba, Baidu, and JD.com and list on a US exchange (either the NASDAQ or NYSE). However, only one thing is sure right now and that is that Xiaomi has NOT filed any paperwork or expressed any intention of going public as of 9/27/2016.
If an IPO is announced, you will not be able to buy any Xiaomi stock before the first day it opens on an exchange. It just isn’t possible for ordinary investors to get access to shares at the pre IPO price. So, like millions of other investors, you will have to wait for the opening bell that first day Xiaomi goes public. You will need to have an online broker account ready and waiting with money in it in order to buy the stock.
You Must Have A Broker Account To Buy Xiaomi Stock
In preparation for the time when you can purchase shares of Xiaomi, you should open an account with an online stock broker. There are many brokers to choose from but TD Ameritrade offers low $6.95 per trade fees and it gets great reviews from financial publications year after year. In the 2016 Barron’s rankings of online brokers, TD Ameritrade came in at an impressive 4th place. There are no deposit minimums and so for investors of any level, TD Ameritrade is a great choice for a broker and it is the one I use for the portfolio on the front page of this website. Whatever broker you decide on, it is important to get everything approved, set up, and put money in your account so that you are ready to buy Xiaomi stock on that first IPO day.
**One of the biggest mistakes new investors make is they never actually get around to funding their account and start trading. Before you buy Xiaomi if it goes public you should get started investing by buying other stocks and building a portfolio of companies you like.
Buying stocks is easy once you have an online broker account and you can buy the stock of any company that is listed on an American exchange. I am assuming that Xiaomi will eventually choose to list in America because it can get more funding and exposure that way than it could if it listed on a Chinese exchange.
Will Xiaomi Stock Be A Good Investment?
For most of 2015, Xiaomi products increased in popularity world wide. But a 11/25/2015 article from Bloomberg Business questioned whether the companies current valuation of about $45 billon is too much based on new reports that sales are starting to slow. There are now rumors that Xiaomi will be unable to meet its projected sales numbers of phones this year due to increased competition from rival smartphone makers. Up until now Xiaomi has made its name by trying to make quality products at bargain basement prices but that strategy is extremely risky with little room for error.
Xiaomi is one of the top market share leaders in China for cell phones and it is trying to branch out to sell to the rest of the world as well. Its strategy is to sell to as many people as possible and make a little on each product purchase. That strategy is much the opposite of Apple that is content with having a smaller base of customers and charging a premium price. So far Apple is dominating when it comes to profiting in cell phones so it is unknown whether Xiaomi will ultimately succeed with their model of making money.
If you want to buy Xiaomi stock, you should feel that it will continue to make money by taking market share and becoming popular with the masses. There are billions of people out there in the world and it is thought that eventually most of them will own a smartphone so Xiaomi is hoping to capitalize on that. It will need to continue to make quality electronic products that are affordable for the common person and be profitable at the same time for the stock to be a good one to own.