On the same evening that its stock price plunged over 18% on the first day of a lockup expiry, MiniMax initiated its largest post-IPO fundraising effort, aiming to secure approximately $1.9 billion through a combination of a new share placement and zero-coupon convertible bonds.

This fundraising amount is nearly triple the net proceeds of its $680 million January IPO. The timing's sensitivity and the aggressive structure of the deal underscore the intense funding needs of AI large language model companies in the ongoing computing power arms race.

According to media reports, MiniMax plans to place 30 million new shares at a fixed price of HK$268 per share, representing a discount of roughly 9.9% to its closing price of HK$297.4 on the Hong Kong stock exchange on July 9. Concurrently, it will issue HK$6.5 billion in zero-coupon convertible bonds maturing in 2027, with a conversion premium set at 25%. Pricing is expected to be finalized on July 10. Morgan Stanley and UBS Group AG are acting as arrangers for the transaction.

Just hours before the funding plan was revealed, MiniMax had endured its worst trading day since listing six months prior. Approximately 153 million locked-up shares, representing 48.9% of the total share capital, became eligible for sale, drastically increasing the free float from under 6% to around 50%. Despite over 80% of major shareholders publicly committing not to sell the night before, the stock price tumbled from an opening price of HK$359.8, hitting a low of HK$290, and closed down over 18% with trading volume surging to six times the daily average.

Initiating such a large-scale fundraising effort while the selling pressure from the lockup expiry is still being absorbed highlights that the company's urgent need for capital has outweighed concerns about short-term share price performance.

The $1.9 Billion Plan: A Dual-Channel Funding Strategy

The combined structure of a share placement and zero-coupon convertible bonds reflects the company's attempt to balance expanding its capital reserves with managing dilution costs.

The placement of 30 million new shares at HK$268, even after the post-unlock sell-off, still comes at a near 10% discount to the closing price, directly increasing equity capital.

The HK$6.5 billion zero-coupon convertible bonds reduce immediate interest costs to zero. The 25% conversion premium means bondholders would only convert to equity if the share price recovers to above HK$371. This offers investors downside protection through the zero-coupon feature until maturity, while retaining an option for potential upside if the share price rebounds.

For comparison, Zhipu AI, after its stock rose nearly 13% on its own lockup expiry day on July 8, subsequently placed 19.8 million H-shares at a discount of 7% to 13%, raising about HK$31.5 billion. Its pricing environment was notably more favorable than MiniMax's, which launched its fundraising with a larger discount on a day of steep share price decline.

Raising Triple the IPO Amount in Six Months: Where Will the Funds Go?

The primary signal from this $1.9 billion raise is that MiniMax is burning through cash at a pace far exceeding market expectations since its listing.

The company's January IPO, including the over-allotment option, netted approximately $680 million. Just six months later, the new fundraising round approaches triple that IPO amount.

According to prior reports from technology media The Information, MiniMax is developing its next-generation large model, M3 Pro, with a parameter scale of 2.7 trillion, planned for release and open-sourcing as early as the third quarter. It also aims to establish its first domestic computing power cluster by the end of Q3. As model parameters leap from hundreds of billions to trillions, the computing power costs required for training and inference grow exponentially.

During an early July conference call, MiniMax management outlined a clear path for Annual Recurring Revenue growth: reaching $100 million by December 2025, rising to $150 million by February 2026, doubling again from February to April 2026, and expressing full confidence in achieving a $1 billion ARR target by the end of 2026.

Management also emphasized that its self-operated computing power utilization exceeds 90%, supporting cost advantages through peak-valley load balancing. Goldman Sachs subsequently maintained a Buy rating with a 12-month target price of HK$860.

However, this optimistic ARR narrative requires time to validate. MiniMax's flagship M3 model, launched on June 1, announced a permanent 50% price cut just about a week later, prompting J.P. Morgan to downgrade its rating from "Overweight" to "Neutral."

Post-Lockup Pressure Persists: The Funding Round as a Confidence Test

The sharp decline on July 9 served as a reminder that with the free float exploding from under 6% to about 50%, the dynamics influencing MiniMax's share price have fundamentally shifted.

Although strategic shareholders like Alibaba (holding approximately 13%) and miHoYo (holding about 5.24%) have stated they will not sell, market-oriented financial investors such as Hillhouse Capital and Sequoia Capital face objective exit pressure and performance evaluation demands.

This $1.9 billion fundraising effort is, on one hand, a survival necessity. In the escalating computing power arms race, the company that secures sufficient ammunition first gains an advantage in the next model iteration cycle.

On the other hand, it is a stress test for market confidence. Amid the aftershocks of the post-unlock plunge, whether investors are willing to accept new shares at a 9.9% discount and subscribe to convertible bonds with zero-coupon terms will directly test the market's belief in MiniMax's long-term growth story.

The endorsement from arrangers Morgan Stanley and UBS is certainly significant. However, the ultimate success of this aggressive funding operation hinges on whether the market believes M3 Pro can be delivered as promised and whether the $1 billion ARR target can transition from a commitment to reality.