Shein cleared its key hurdle on Friday. China approved its long-awaited Hong Kong listing — one that could value the fast-fashion giant at more than $40 billion.
The plan calls for issuing 341.6 million H shares, possibly as early as the third quarter. The paperwork, in other words, is real.
Now read that valuation twice. Shein was worth about $66 billion in a 2023 fundraising round.
The price tag has fallen steadily since, squeezed by competition from Temu and by persistent geopolitical uncertainty. A markdown that steady is not a sale-rack accident.
Three Venues, Three Years
The U.S. listing died in 2024 over supply-chain scrutiny. The London attempt died in a trade flare-up. Hong Kong is venue number three.
Along the way, the end of the de minimis loophole — a rule that let cheap packages into the U.S. duty-free — took another bite out of the business.
A company marked down from $66 billion to maybe $40 billion across three failed venues in three years is not a growth story. It is a liquidity event — a chance for early investors to finally cash out.
The people who bought at $66 billion need someone to sell to. An IPO — a company’s first sale of shares to the public — is how they find that someone.
We decline the honor. We do not buy other people’s exits with retirement money.
None of that is an insult to Shein. It sells an enormous amount of clothing. But a stock’s job is not to be famous — its job is to compound, and compounding starts with the entry price.
The Window Is Wide Open
The bigger tell is the backdrop. SpaceX just pulled off an $86 billion IPO, the largest ever, and OpenAI and Anthropic are circling the public markets.
When the IPO window is open this wide, everything comes through it at once. That is precisely when the merchandise gets mixed — quality and clearance on the same rack.
An open window is great for sellers. Notice who is doing the selling.
History is blunt about open windows: they close, and the last buyers through them pay the tab. Nobody rings a bell then, either.
Our Rule Holds
Our IPO rule is boring on purpose. We buy the second annual report, not the first roadshow — the roadshow is the sales tour a company runs before it lists.
By the second annual report, the confetti is gone and the numbers have to stand on their own. Companies that survive that test are still buyable. Most of the exciting ones are not.
Waiting costs us nothing but bragging rights.
So Shein goes in the file marked “interesting, not ours.” If the business proves itself as a public company, we can pay for proof later.
The Capital Wealth Growth Portfolio can afford to miss a debut. It cannot afford to fund someone else’s exit.