China's Hottest AI Stocks Face a July Lockup Cliff That Could Burst Their Scarcity Premium

Short sellers targeting China's most talked-about listed AI companies have spent months fighting a structural headwind: there simply aren't enough shares available to borrow. That scarcity premium may begin to crack in July, when lockup agreements expire and large blocks of stock become eligible for sale for the first time since their public debuts.

The Details

Two of the best-performing listings on the Hong Kong Stock Exchange this year are companies that market participants treat as rare pure-play bets on large-language-model development. MiniMax, which listed its Class A ordinary shares on January 9, 2026, has seen its stock surge roughly eightfold since its debut, according to an April 23 JPMorgan report cited by Edgen.tech. Zhipu is up 570.40% from its IPO price as of early April, according to figures reported by GMT Eight. By that same early April measure, MiniMax-W had risen 475.45% from its own IPO price.

Those gains have been accompanied by what analysts describe as a scarcity premium linked to tightly held supply. Bloomberg reported that short sellers have struggled to build positions against these firms precisely because so few of their shares are publicly tradable. The dynamic, however, is scheduled to shift in July, when lockup periods agreed at the time of listing begin to expire and existing shareholders gain the right to sell.

For MiniMax, the July unlock window could be substantial. JPMorgan warned that 39% of shares are scheduled to unlock in July, according to the Edgen.tech summary. That concentration of newly available stock would mark the largest single release of shares since the company went public and could create significant selling pressure if pre-IPO investors and cornerstone holders choose to reduce positions.

Zhipu's HKEX listing document shows a more staggered structure. The filing states that pathfinder significant independent investors face a six-month lockup ending July 7, 2026. That tranche covers 20.55% of its issued H-shares, or 10.07% of total share capital. Cornerstone investors were allocated 25,681,600 offer shares, equal to 68.63% of the offered shares and 5.83% of total share capital after the global offering. The Edgen.tech report on JPMorgan's analysis noted that 5.8% of Zhipu's shares are set to release in July, while 90.3% are back-end loaded for a January 2027 unlock. That staggered release schedule means MiniMax faces the nearer-term concentration risk, while Zhipu carries a heavier long-dated overhang.

Context

The scarcity of free float has had a tangible effect on short-selling activity. GMT Eight reported that both MiniMax-W and Zhipu were added to Hong Kong's exchange short-selling list on February 27. Rather than attracting a wave of bearish bets, both names saw short interest collapse. By early April, MiniMax-W shorted shares had dropped 83.01% from their peak to 157,200 shares, while Zhipu's shorted shares tumbled 96.85% to 47,500. The data indicates that bearish traders largely retreated rather than pressing harder against the run-up, as the limited pool of borrowable stock made short positions difficult and expensive to maintain.

The dual-name rally has unfolded in a market context where pure-play Chinese LLM listings remain scarce. That scarcity has helped insulate both companies from the kind of two-sided price discovery that typically comes with a deeper, more liquid equity base. As Edgen.tech noted in its summary of JPMorgan's research, the current valuations embed growth assumptions that analysts consider difficult to defend in China's more competitive domestic market. JPMorgan's own assessment was that expectations embedded in the current share prices are high given the competitive landscape these companies must navigate at home.

What's Next

The clock on both companies' lockup agreements points to July as a potential inflection point. For MiniMax, a July unlock of roughly 39% of shares would be the first major release of stock since its January listing, with JPMorgan specifically flagging the potential for selling pressure once those shares hit the market. For Zhipu, the July 7 unlock of pathfinder-related shares is smaller in percentage terms, though it comes alongside a much larger January 2027 overhang that looms further out.

Hong Kong's short-position reporting regime publishes aggregated reportable short positions weekly, which will make any renewed bearish activity observable once the float expands. Bloomberg noted that the scarcity premium that has protected these stocks from short sellers may come to an end in July. Traders and investors will be watching whether the end of that scarcity leads to more balanced price action, renewed short pressure, or a reassessment of valuations built on assumptions that JPMorgan already regards as demanding.