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ZTE shares spike after it’s officially let off the hook – for now

Embattled Chinese kit vendor ZTE has announced its US export ban has been lifted, which prompted a 16% jump in its share price.

Scott Bicheno

July 16, 2018

1 Min Read
ZTE shares spike after it’s officially let off the hook – for now

Embattled Chinese kit vendor ZTE has announced its US export ban has been lifted, which prompted a 16% jump in its share price.

Last week the US Department of Commerce tweeted that it would lift the ‘denial order’ on ZTE once it had handed over $400 million to be kept aside to deter it from getting up to its old tricks. This announcement indicates ZTE has managed to scrape together the cash and has now jumped through sufficient hoops to get off the hook – for now.

“Pursuant to an order issued on 13 July 2018 (U.S. time), BIS has terminated the 15 April 2018 Denial Order and removed ZTE from the Denied Persons List, effective immediately,” said the short, legalese investor announcement from new Chairman Li Zixue.

So that would appear to be that. So long as ZTE is squeaky clean for a few years it will eventually get the 400 mil back and it’s now free to start trying to repair the colossal damage this whole episode has caused. There’s still the matter of the dissenting senators, but this seems to be a fait accompli.

The 16% share price spike points to limited optimism from investors that it will be able to do that, and its preliminary results for the first half of this year anticipate a loss of around RMB8 billion (over $1 billion) – a 450% year-on-year decrease – so it might not be time to break out the bubbly at ZTE towers just yet.

About the Author(s)

Scott Bicheno

As the Editorial Director of Telecoms.com, Scott oversees all editorial activity on the site and also manages the Telecoms.com Intelligence arm, which focuses on analysis and bespoke content.
Scott has been covering the mobile phone and broader technology industries for over ten years. Prior to Telecoms.com Scott was the primary smartphone specialist at industry analyst Strategy Analytics’. Before that Scott was a technology journalist, covering the PC and telecoms sectors from a business perspective.
Follow him @scottbicheno

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