Steep drop in SenseTime stock appears to reflect financial, not facial recognition market
Shares in SenseTime plunged to half their previous price after a lock-in period for pre-IPO investors ended, allowing them to take their profits from stakes in the facial recognition giant.
SenseTime is still referred to by the Financial Times as the most valuable artificial intelligence company in China, but with many investors blocked from involvement with SenseTime by U.S. sanctions for the use of its facial recognition in repressive state systems, its shares fell as low as HK$2.90 (approximately US$0.37) in early-Thursday trading.
It has been a wild ride for SenseTime share prices, with an initial price of HK$3.85 doubling in the weeks following its public stock launch.
An analyst with Periscope Analytics suggested that with Chinese tech stocks being battered over the past six months, investors are simply taking the opportunity to exit the investment space.
State investors also moved off of SenseTime stock in order to prevent state-backed funds from recording a loss.
Another group of shares are locked in until December 29, 2022, raising the prospect of a further drop late this year.
A statement from SenseTime says the company is confidant in the long-term value and prospects of its facial recognition and other AI technologies.