July 9, 2026, marked a brutal day of reckoning for MiniMax, one of China’s most prominent generative AI unicorns. On its first major lock-up expiration day, the company saw 1.53 billion restricted shares—representing nearly half of its total equity—become available for trade. The sudden flood of liquidity, increasing the tradable float from 6% to 50%, triggered a massive sell-off that the market was unprepared to absorb.
Despite a high-profile public pledge from over 80% of its shareholders to hold their positions, the market responded with a wave of selling that sent the stock tumbling over 18%. In just three months, MiniMax has seen its market valuation evaporate by a staggering 77%, falling from a peak of over 400 billion HKD to less than 100 billion HKD. This rout highlights a growing disconnect between the strategic optimism of corporate giants and the cold calculations of secondary market traders.
The carnage at MiniMax is further complicated by its rivalry with Zhipu AI, another industry leader that shares many of the same heavyweight backers, including Alibaba and Tencent. In what traders describe as a ‘pair trade,’ capital appears to be fleeing MiniMax’s consumer-centric model in favor of Zhipu’s more stable business-to-business revenue streams. While Zhipu has successfully defended its valuation through high-margin government and enterprise contracts, MiniMax’s heavy reliance on low-margin consumer apps has left it vulnerable.
Financial investors, including early backers like Hillhouse and Sequoia China, are facing increasing pressure to deliver Distributed to Paid-In Capital (DPI) returns. For these funds, the temptation to lock in gains from early-stage valuations outweighs the soft ‘non-selling’ commitments made by the company’s strategic partners. The divergence in behavior suggests that in the high-stakes world of Chinese AI, verbal loyalty is no match for the urgent need for liquidity in a tightening capital environment.