ZTE shares plunged in Hong Kong as the Chinese tech company reels from a debilitating US ban on the supply of crucial parts.
Shares in ZTE plunged more than 40% on Wednesday as the Chinese tech company reels from a crippling US ban on the supply of crucial parts.
The sharp drop wiped billions of dollars off the company’s market value.
The Hong Kong-listed stock of ZTE ( ZTCOF), which makes smartphones and other telecommunications equipment, had been suspended for the past eight weeks after the US Commerce Department blocked American firms from selling parts or providing services to the company.
Commerce Secretary Wilbur Ross announced a deal last week to lift the ban, which had brought ZTE’s factories to a standstill. Under the agreement, the Chinese company will have to pay a fine of $1 billion, set aside another $400 million, completely overhaul its senior management and bring on board an American monitoring team.
ZTE said in a statement late Tuesday that it had asked for its shares to resume trading. On Wednesday in Hong Kong, they nosedived 42% to their lowest level in more than a year.
Analysts had predicted ZTE shares would fall sharply when they resumed trading. They said the lengthy ban has cost the company billions in lost revenue, strained its relationships with customers and hurt its reputation.
