Shein shares tumbled as much as 10 per cent on the third day of trading following its Hong Kong listing in a turbulent debut for the fast-fashion online retailer. The China-founded group’s stock fell as low as HK$41.24 (US$5.25) on Thursday, down from the listing price of HK$48.56. Shares closed almost 9 per cent lower at HK$42, valuing the company at $22.7bn. "Basically it’s a disaster," said Alicia Garcia-Herrero, chief economist for Asia-Pacific at Natixis.

The stock also fell as much as 10 per cent at the open on Tuesday’s debut but ended nearer the offer price following a flurry of late buying. Goldman Sachs, one of the underwriters on Shein’s initial public offering, acts as the stabilisation agent and is able to buy shares on the open market to bolster the price. Shein said in its IPO prospectus that it had $15bn in cash and short-term securities on its balance sheet.

The company is set to be added to Hong Kong’s Hang Seng Composite index at the close of trading on September 14, according to Hang Seng Indexes. The Hong Kong Exchange also debuted weekly and monthly options for the stock on Tuesday, as well as allowed investors to take short positions. Shein’s IPO value represents a sharp fall from its peak. Pandemic lockdowns and social media hype from “Shein hauls” drew young consumers to its affordable fashion and earned the company a valuation of about $100bn following a 2022 private fundraising round.

However, investor enthusiasm began to ebb later that year and the next fundraising valued Shein at $66bn. Its previous attempts to list in New York and London were derailed by opposition from politicians and regulators amid scrutiny of its Chinese supply chain. In July, Chinese regulators approved its application to list in Hong Kong. Analysts said Shein’s falling share price reflected a wider investor malaise around consumer companies. "The global consumer is starting to weaken in the US and Europe," said William Bratton, head of cash equity research for Asia-Pacific at BNP Paribas. "The other problem is tech: when I speak to clients, consumer is rarely discussed."