Shares of Zhihu (ZH -1.70%), a Chinese question-and-answer website similar to Quora, were falling today after the company announced plans for a secondary offering that included a listing in Hong Kong. A broader sell-off of stocks and the ongoing lockdown in Shanghai may have also weighed on Zhihu today.
As of 11:46 a.m. ET, the Chinese tech stock was down 13.5%.
Zhihu filed after hours on Friday to sell 26 million existing shares, 2.6 million of which will be for a new dual primary listing in Hong Kong.
The listing in Hong Kong, which follows several other similar moves of U.S.-listed Chinese stocks, may be a response to threats about delisting Chinese stocks from the Securities and Exchange Commission (SEC), though there doesn't appear to be any specific threat to Zhihu. The SEC has said before that Chinese companies that do not allow the U.S. government to examine their financial audits could be delisted from U.S. exchanges, though more recently Beijing has said it would take steps to accommodate those requests.
Also today, both Chinese and U.S. stocks were moving lower on fears of rising interest rates and the ongoing lockdown in Shanghai, which is reportedly starting to cause shortages of food and medical supplies. Investors fear that draconian measures could hit other Chinese cities as well.
Finally, Goldman Sachs analyst Lincoln Kong assumed coverage on the stock with a neutral rating and a price target of $4.70, though that didn't seem to affect the stock's decline today.
Like other Chinese stocks, Zhihu shares have fallen sharply over the last year, down 74% due to the regulatory crackdown in China and fears of delisting in the U.S. The sell-off today seems a bit odd since there's nothing unusual about a dual listing in Hong Kong, but Chinese tech stocks, especially small-cap ones, have been volatile. So it's not completely surprising to see a relatively minor announcement trigger a double-digit sell-off like today's.