Guys, lately, whether it’s trading crypto or stocks, everyone has been closely watching macro liquidity. But just from the traditional finance world (TradFi), an extremely hardcore signal has come out: the super unicorn SHEIN (Shein) is set to begin gauging demand for a Hong Kong IPO as early as this week—possibly even kicking off pre-roadshows by Thursday! The expected fundraising size is between $2 billion and $3 billion.
Don’t think this is just a matter for the e-commerce industry. Look at it as a classic case of a “Web2 giant bleeding at the open in the secondary market after failing geopolitics-and-compliance, forced to.” There’s absolutely strong reference value for all of us who play Crypto. Let’s take a Web3 perspective to break down this big scoop and see just how short of liquidity the capital markets are right now:
📉 1. “Ankles cut” valuation—classic high-position trapped capital
If you think the scam coins are dropping terribly, take a look at the scoreboard of top-tier VCs. At the peak of 2022, SHEIN was valued as high as $98.2 billion—absolutely the world’s third-largest unicorn. But this time’s Hong Kong IPO: the target valuation reportedly floating in the market is only $30–$40 billion.
With one fell swoop, nearly $60 billion in market value is wiped out! Back in 2023 and even in the private rounds this past April, this company still clung to a valuation of $64 billion. Now it has finally come to terms with reality. What does this mean? The “air lock” of the primary market can’t hold anymore—early-stage VCs desperately need to exit for liquidity. Even if it means a 30% off-and-on-sale fire sale, they still have to turn paper wealth into real money (cash).
🔀 2. Trying both the U.S. and the U.K. runs into walls—does Hong Kong become the “buyer” or the “safe harbor”?
SHEIN’s original dream was to ring the bell in New York. Later it also wanted to shift to London—only to be repeatedly obstructed by various supply-chain reviews and regulatory factors. In the end, after circling around and getting a filing with the China Securities Regulatory Commission, it quickly headed to the Hong Kong Stock Exchange.
This is a plot our crypto bros are way too familiar with! The project team wants to “list in the Big League” in regions with strict regulation to comply—only to be targeted by the SEC in every possible way. In the end, they can only choose a “force from the East” that is more policy-friendly. Hong Kong is now not only an oasis for Web3, but also the final lifeboat for overseas financing giants like this batch. Whether this $2–$3 billion cash grab can be absorbed depends on whether liquidity in Hong Kong-listed stock pools can take it.
⚔️ 3. The moat is being eroded by internal competition, and the fundamentals suffer a “dimension-reduction strike”
E-commerce PvP (player vs. player) is even more brutal than the fight over public chains. SHEIN’s situation is now being hit by multiple fronts at once:
“Gas fees” surge: Starting last month, the EU began charging a €3 fee per low-value e-commerce parcel. The U.S. also scrapped low-value tax exemptions. The era of leveraging loopholes in tax exemptions to drive extremely low average order values has ended—transaction friction costs have skyrocketed.
A competitor that “sucks blood”: Temu’s overseas version by its neighbor is wildly throwing money to steal traffic, going toe-to-toe with SHEIN right in the lower-tier markets.
“Pinprick” in the financial report: A draft prospectus filed last month shows that SHEIN just recorded a $99 million quarterly loss (driven by the impact of the U.S. tax-exemption policy ending, plus accounting treatment for a preferred stock fair value item as high as $328 million). Although some of it is an unrealized paper loss, the slowdown in revenue growth is already plain to see.
💡 Square, bros—wealth enlightenment:
Macro liquidity has dried up across the board. Even SHEIN, which was once a cash cow and the #1 cross-border e-commerce champion, has to accept a “down round” bloodied IPO in this capital winter. Earning money in TradFi has become harder—and that in turn shows that capital is becoming more selective.
The bubble in the primary market will eventually burst in the secondary market. Whether you’re issuing tokens or issuing stock—without incremental funds coming in as buyers, valuation can only revert to the mean. If SHEIN truly ends up listing at a valuation of $30 billion, that would actually be a highly cost-effective “bargain price.” But will the secondary market bite? If even IPOs at this level break below the issue price, it means retail investors and institutions no longer believe the growth fairy tale for Web2.
Watch the diversion of Asia-Pacific capital: An IPO of tens of billions of dollars is no small matter for Hong Kong equities. If all the Asia-Pacific capital rushes to subscribe to the IPO, it will have a short-term siphoning effect on market liquidity.
This Thursday, let’s watch how SHEIN’s roadshow performance in Hong Kong unfolds. If you were in charge, facing a Web2 giant whose valuation gets chopped at the ankles, would you subscribe to the new shares—or go back to adding more to your crypto faith?👇
Feel free to discuss your views in the comments!
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