Hong Kong’s IPO rush backfires as robot-taxi stars tumble

6 November 2025

A WeRide autonomous taxi is seen in Guangzhou, Guangdong province, China May 15, 2020. Picture taken May 15, 2020. REUTERS/Yilei Sun/File Photo

In the bustling trading floors of Hong Kong on 6 November 2025, the strong momentum in the initial public offering market hit a significant stumbling block as two high-profile Chinese autonomous driving companies, Pony.ai and WeRide, saw their stock prices fall sharply in their debut a sign that investor enthusiasm for the region’s booming share-listing wave might be cooling.

Pony.ai, which had raised approximately US $863 million through its Hong Kong listing, saw its shares drop about 9.3 % below the issue price after trading commenced. WeRide, which raised about US $308 million, fared even worse. Its stock closed down around 10 % from the issue price. The declines mark a stark contrast to the heady days when technology IPOs routinely surged.

The companies’ poor debut comes against the backdrop of Hong Kong surging as a global hub for large capital-market transactions this year. LSEG data show that the city has already raised over US $31 billion in initial public offerings and secondary listings outpacing the New York Stock Exchange and Nasdaq in listing volume, excluding SPACs. But that strong headline doesn’t tell the whole story: beneath the surface the appetite for newly listed names appears to be waning as supply outpaces demand.

Analysts say multiple factors converged to create the weak performances. One fundamental issue is investor fatigue: with so many companies entering the market, each gets a smaller piece of the available capital, and thus fewer fresh buyers to drive share price gains. As noted by strategist Kenny Ng of Everbright Securities International in Hong Kong, the “recent concentration of new listings” means there is less money for each listing hopeful.

Another factor is the performance of the companies’ U.S.-listed siblings. Pony.ai and WeRide had already traded in the United States and both faced declines before their Hong Kong debut. WeRide’s shares had dropped 5.2 % in New York on the day prior, Pony.ai’s had slipped by about 2 %. This linkage meant investors in Hong Kong were cautious from the outset.

For investors and market watchers the implications are meaningful. A healthy IPO environment depends not only on strong listings but also on post-listing performance that sustains investor confidence and encourages fresh issuance. If newly minted stocks underperform, the risk is that upcoming IPOs may be priced more conservatively or delayed, undermining the broader capital-market ecosystem. The technology-heavy nature of recent listings adds another layer: if tech names, especially those tied to high ambition and long time-horizons such as autonomous driving, struggle early on, broader investor sentiment can shift.

In Hong Kong’s case the historical context amplifies the importance of this moment. After years of slower listings, the city had carved out a revival path in 2025, riding China’s reopening, regulatory support and a favourable global environment for equity financing. To see that surge now facing heat suggests that momentum alone may not sustain indefinitely. The IPO market isn’t just about raising money; it’s about execution, growth expectations and the ability of companies to justify lofty valuations in the face of real performance.

Companies such as Pony.ai and WeRide go to the market promising future growth, large addressable markets and disruptive technology. But when the initial trading session results in double-digit losses, investors raise questions about how soon the promised growth will materialise, whether cash-burn rates are sustainable, and how newly raised capital will be deployed. In a crowded market every listing is compared not only to the broad economy but to its peers and early stumbles get amplified.

It is not all doom and gloom: Hong Kong’s Hang Seng Index rallied some 2.1 % the same day, showing that broader market sentiment had rebounded from recent declines. But the rebound in indices doesn’t erase the implications for new-issue valuations and the health of the IPO-pipeline.

Looking ahead there are several questions that will matter for Hong Kong’s business ecosystem. Will the IPO market recalibrate to fewer, higher-quality listings rather than many speculative ones? Will investors require more conservative pricing, stronger disclosures or proven track records before participating? And how will tech companies, especially those with cross-listing histories, calibrate their expectations given both local and international investor wariness?

In short this episode reflects both the opportunities and the fragilities of Hong Kong’s capital-market revival. The city remains a magnet for IPOs, especially for Chinese companies seeking global capital, but the era of automatic gains simply because you list may be ending. For companies, investors and policymakers alike the lesson may be that momentum cannot replace fundamentals. The honeymoon of listing is over; now comes the test of performance.