Shares of MiniMax Group Inc (0100.HK) whipsawed this week, tumbling 4.2% to HK$220.00 on Tuesday after a stunning rebound that saw the stock surge from HK$197.00 to HK$229.60 in just three trading days — a swing of nearly 17% — with no new earnings, product launch, or partnership to justify the move. MiniMax Surges on Pure AI Hype After a Brutal July — But Can Sentiment Alone Sustain a Stock That Burns $250 Million a Year?

Shares of MiniMax Group (0100.HK) have been swinging violently, dropping 4.2% to HK$220 on July 29 after surging 17% in the prior three sessions — all without a single new product announcement or earnings update. The Shanghai-based AI model developer, which builds tools that generate text, video, audio, and music, is being swept up in a broader rotation back into Chinese AI names. For shareholders, the question is stark: in a stock that has cratered more than 80% from its March peak, is this a durable bottom or just another head-fake?

  • A Massive Fundraise Just Diluted Existing Shareholders. Earlier this month, MiniMax issued 35.6 million new shares at HK$268 apiece, raising roughly HK$9.5 billion (about US$1.2 billion).

It simultaneously sold HK$6.5 billion in zero-coupon convertible bonds due 2027, convertible at HK$335 per share — meaning yet more shares could flood the market later. The share placement alone represents about 11.35% of existing share capital, a significant dilution for public investors. That is the single most important fact behind the stock's collapse from nearly HK$300 to the low HK$190s in just weeks.

  • JPMorgan Slashed Its Price Target — Twice in One Month. JPMorgan lowered its MiniMax target from HK$300 to HK$240 in July — the second cut that month — after having already slashed it from HK$1,100 to HK$400 in mid-June and downgrading the stock to Neutral.

UBS also cut its target by half. When two major banks retreat this fast, it signals that the institutional narrative around the stock is breaking down, not building.

  • Revenue Is Growing Fast, but Losses Are Enormous. Full-year 2025 revenue hit US$79 million, up 158.9% year-over-year, with more than 70% from international markets. Sounds impressive — until you see the other side. Adjusted net losses totaled US$250.9 million , and R&D expenses alone climbed to US$252.8 million — more than three times total revenue. The company is spending aggressively on AI training and infrastructure with no clear path to profitability.

  • Lockup Expiry Unleashed a Wave of Selling Pressure. Cornerstone investor lockups expired on July 8, freeing early backers to sell.

Analysts warned this, combined with large secondary placements across AI stocks, created dual selling pressure in Hong Kong. Today's rebound is happening against that still-unresolved supply overhang, making it fragile by nature.

The bottom line: MiniMax's technology ambitions are real, but so is its cash burn. Until revenue catches up to spending — or a major catalyst emerges — this stock remains a momentum trade, not an investment thesis.