Xiaomi has become the latest smartphone vendor to be added to the list of companies blacklisted from receiving investments from US citizens and companies.
The list includes companies that the US government has deemed to be controlled or connected to the People’s Liberation Army (PLA). It’s therefore, an obvious geopolitical move to slow down the influence of the company.
By being added to the list, it means that no US citizen or company can invest in the company. This is a hit to the company since it means it’s now cut off from receiving investments from the venture capital of the world.
In addition to this, US companies that have invested in Xiaomi have until November 2021 to divest from the company.
This is bad news for the company since by it being a public traded company it’s likely to lose a huge chunk of its market capitalisation. Xiaomi lost just over 10% of its market value just soon after the list was published.
It’s worth noting that, this list is different from the one Huawei was placed in. It’s still a terrible list but it’s better than being banned from dealing with any US entity.
Xiaomi was among the fortunate beneficiary of the Huawei ban. The company was projected to become the third-largest smartphone vendor in the world. However, this new development has thrown a wrench into the works.
On the flip side, it’s worth noting that the ban is an effect of Trump’s presidency. Therefore, with the change of guard to a more liberal administration, it will be interesting to see if finally, Chinese tech companies will stop being victims of Uncle Sam’s sledgehammer.
Next: Camscanner and WPS Office among the list of apps to be banned from the Google Play Store
Kevin is a tech enthusiast and the lead writer at MobiTrends.co.ke. He has been writing about smartphones and tech related topics since October 2012. About Us | Contact Us
