After-hours on the unlock day, an emergency $1.9 billion financing was launched: MiniMax fights the “life-saving battle” for computing power with a discounted rights offering plus zero-coupon convertible bonds.

On July 9, the same night MiniMax's share price plunged over 18% on the first day of the lock-up expiration, the company launched its largest refinancing since its listing—a combination of a new share placement and zero-coupon convertible bonds, seeking to raise approximately $1.9 billion.

The size of this financing is nearly three times the net IPO proceeds of $680 million in January. The timing and aggressive structure reveal the AI large model company's extreme thirst for capital in the 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, a discount of approximately 9.9% from the closing price of HK$297.4 on July 9. Concurrently, it will issue HK$6.5 billion in zero-coupon convertible bonds due 2027, with a conversion premium of 25%, and pricing is expected to be completed on July 10. Morgan Stanley and UBS are acting as arrangers for the transaction.

Just hours before the financing plan was disclosed, MiniMax had experienced its worst trading day in six months since listing: 153 million locked-up shares became tradable, accounting for 48.9% of total share capital, expanding the free float from less than 6% to about 50% overnight. Although more than 80% of shareholders publicly stated they would not reduce holdings the night before, the stock price fell from an opening of HK$359.8 to a low of HK$290, closing down over 18%, with trading volume surging to six times the daily average.

Launching a large-scale refinancing just as the sell-off pressure from the lock-up expiration has not yet been fully absorbed highlights the company's urgent need for funds, outweighing concerns about short-term stock price impact.

How to raise $1.9 billion: The "extreme operation" via dual equity and debt channels

This financing adopts a combination of a rights issue and zero-coupon convertible bonds, reflecting the company's trade-off between expanding capital reserves and controlling dilution costs.

The 30 million new shares are priced at HK$268 per share, still a nearly 10% discount from the closing price after the plunge on the lock-up expiration day, directly increasing equity.

The HK$6.5 billion zero-coupon convertible bond reduces current interest burden to zero—a 25% conversion premium means bondholders will only convert if the stock price recovers above HK$371. This offers investors both downside protection (holding to maturity at zero coupon) and an upside option if the stock price recovers.

From a comparable perspective, Zhipu, after its stock price rose nearly 13% on the first day of the lock-up expiration on July 8, immediately placed 19.8 million H-shares at a discount of 7% to 13%, raising approximately HK$31.5 billion. The pricing environment was significantly better than MiniMax's—the latter launched its financing at a larger discount on the day of the stock price crash.

Six months after IPO, financing three times larger: Where will the money be burned?

The most direct signal from this $1.9 billion financing is that MiniMax's capital consumption rate after listing far exceeds market expectations.

The company's January IPO and over-allotment option together raised net proceeds of about $680 million. Just six months later, the new financing scale has approached three times the IPO proceeds.

According to tech media The Information, MiniMax is developing a new-generation large model M3 Pro with 2.7 trillion parameters, planning to release and open-source it as early as the third quarter, while also building its first domestic computing power cluster by the end of the third quarter. As model parameters jump from hundreds of billions to trillions, the computing power costs for training and inference increase exponentially.

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

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

However, the optimistic ARR narrative needs time to verify. MiniMax's flagship model M3, launched on June 1, announced a permanent 50% price cut just a week later, prompting JPMorgan to downgrade its rating from "overweight" to "neutral."

Lock-up pressure not over, refinancing is a confidence test

The plunge on the first day of the lock-up expiration on July 9 reminds the market: after the free float expanded from less than 6% to about 50%, MiniMax's stock pricing power has fundamentally changed.

Although strategic shareholders such as Alibaba (holding ~13%) and miHoYo (holding ~5.24%) have stated they will not reduce holdings, market-oriented financial investors like Hillhouse and Sequoia face objective exit performance pressure.

This $1.9 billion refinancing is, on one hand, a survival necessity—amid the escalating computing power arms race, whoever secures sufficient ammunition first will take the initiative in the next model iteration;

On the other hand, it is a stress test for market confidence—in the aftershock of the lock-up plunge, whether investors are willing to take new shares at a 9.9% discount and subscribe to convertible bonds with zero-coupon terms will directly test the market's recognition of MiniMax's long-term growth narrative.

While the endorsement from Morgan Stanley and UBS as arrangers is important, the ultimate success of this "extreme operation" depends on whether the market believes the M3 Pro will be delivered as promised and whether the $1 billion ARR target will transform from commitment to reality.

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