China's Xiaomi, once dubbed the "Apple of China," is in the middle of a months-long rout and facing familiar headwinds in the global smartphone market.
The stock has shed 25 percent this year, plummeting to all-time lows and trading below 10 Hong Kong dollars. The company's market cap now hovers around HK$240 billion ($30 billion).
Xiaomi, founded in 2010 in Beijing, rose to impressive market share among global competitors such as Huawei, Samsung and Apple. It markets high-quality devices at comparatively lower prices and has more recently diversified its business to include other connected devices and services revenue.
The company went public on Hong Kong exchanges in July at an implied valuation of US$54 billion, but now trades more than 50 percent below all-time highs. The stock has posted only one month of gains since debuting.
Many of Xiaomi's challenges will sound familiar.
Global smartphone demand is slowing, as devices flood established markets and upgrade cycles lengthen. Industry researcher IDC has been tracking year-over-year declines in global smartphone sales for the last several quarters.
Analysts and industry watchers have been calling out the trend for months, but it appears to have set in with shareholders in recent weeks.
Apple issued a rare warning of weaker-than-expected iPhone sales earlier this month, spurring the stock's worst day of trading in six years. Samsung cited a "stagnant and fiercely competitive smartphone market" in lowering its own quarterly expectations last week.
Xiaomi, the fourth-largest global smartphone maker, still counts on the devices for 70 percent of its revenue, according to FactSet data. That figure is trending downward as the company's internet of things and other lifestyle products accounts for a larger share, but the bulk of Xiaomi's revenue is still dependent on smartphone sales.
Xiaomi has a unique issue of timing, as well. The company's six-month lockup period following its IPO just expired, ushering in a wave of sales by early investors.
The stock suffered a particularly painful three-day period last week, immediately following the end of the lockup period. Shares fell almost 17 percent in the three-day period and traded at daily volumes not seen since its first few days on the public markets.
On Wednesday in Hong Kong, the stock fell 2.6 percent and traded at more than 700 percent the 30-day average trading volume.
Compounding the headwinds is a general economic slowdown in China, where Xiaomi banks more than 70 percent of its revenue, according to FactSet data.
China's growth slowed in 2018 as a years-long campaign to reduce a mountain of debt and a crackdown on riskier lending practices hurt domestic demand. Ongoing trade tensions with the U.S. and rising tariffs on exported goods have stunted the economy even further, leading regulators to plan aggressive stimulus.
The country has long stood as the largest smartphone market in the world, so reduced consumer spending is likely to hurt the industry.
— Reuters and CNBC's Uptin Saiidi and Arjun Kharpal contributed to this report.