Home Market News Crypto The Market Has Wiped $3 Billion Off ZTE’s Value

The Market Has Wiped $3 Billion Off ZTE’s Value


Investors have knocked over $3 billion off the market value for ZTE and this came after the trading of shares resumed. The Chinese telecom group agreed to pay a fine of well over $1 billion and they have also agreed to replace their entire board as well. The main reason why this happened is because they didn’t honour the earlier penalties that they received after they busted sales to Iran. Shares in the company have fallen by around 41% so far and this is especially the case when you look at the early trading in Hong Kong. The shares in Shenzhen fell by 10% and this is the maximum that is allowed when you look at the limit-down rules. ZTE has been at the heart of any negotiations that happen in the US and even in China as well. The US have barred it from buying any vital components from the US and this move put ZTE in a very tight corner. They had to stop their own production as a result and they have also halted their shares as well. The timing clampdown on ZTE ultimately means that it became a huge bargaining chip in the tech war between China and the US. This has also had its fair share of concern about technology and the idea of it being leaked as well.

Donald Trump set the ball rolling last month when he asked for a reversal on the ban. He sent out a tweet saying that both he and Xi Jinping, the president of China had talked and that they wanted to give ZTE a way to get back into business as soon as possible They stated that the loss of jobs in China was a huge motivator for this, but it is a known fact that Trump has also faced a lot of resistance from US Congress about this. A bipartisan group has attached a bill that states that the ZTE deal would unwind if the US military is funded but it is not clear if this is going to stay in motion or not.

ZTE have released a statement, stating that they have agreed to pay the fine to the US government and that they are also going to send over $4 million as well, This is going to be held in Escrow if they were caught violating then agreement. This comes for the US commerce secretary and this comment was made last week. ZTE have agreed to replace all of their directors and they have also replaced their subsidiary as well. This is being done to try and create a special audit committee. The company have shrugged off parts to do with an earlier settlement with the US and they have also rewarded responsible people rather than punishing them. So far, the group have been said to have lost $2 billion in revenue since the imposition ban and this is especially the case when you look at the US components by Washington. According to the calculations that were done last year, the damage to prospects could actually linger, and this is especially the case if suppliers and even clients as well were to reassess their supply lines. ZTE have agreed to pay $1.2 billion in fines for the sanctions that they violated with Iran and even North Korea as well, so this is especially interesting to say the least.


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