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Zhihu Inc. (ZH) Stock in Doldrums, Here’s the Reason

Zhihu Inc. (ZH), an online content community platform, closed Friday’s regular trading session at $2.56 after declining 2.66% during the day. In the premarket session, ZH has further slid by 4.69% and consequently is trading at $2.44 at the time of the writing.

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ZH Launched Global Offering

ZH stock has been faltering since the launch of its global offering. On Friday, after the closure of the market, ZH announced that it would be launching the global offering of 26,000,000 Class A ordinary shares. The ADS of the company were to remain listed and traded on NYSE. The class A ordinary shares of the company comprise a Hong Kong Public offering of 2,600,000 Class A ordinary shares and an international offering of initially 23,400,000 Class A ordinary shares.

Internet Stock on a Roller Coaster Ride

The internet stocks like ZH have been on the cheaper side since the start of 2022. Hence, market observers are of the view that the investors have a prime opportunity to buy these stocks. COVID-19 pandemic provided the internet companies with an unprecedented boom, but as soon as the impacts of the pandemic started subsiding, investors preferred other high-rewarding sectors, like oil and gas, etc. However, the upcoming period doesn’t look too bleak for internet stocks.

Catalyst Behind Recent Uptick in ZH

In total contrast to the general sector, ZH is seeing a positive response from investors in recent days. A report that the Chinese authorities are seeking to revise the confidentiality rules related to the offshore listings is the catalyst behind this upsurge in stock price. The insistence of Chinese authorities to condone the amendments in the confidentiality report proved to be a major bone of contention between the US and Chinese regulatory authorities, but with the issue advancing towards an amicable resolution, investors believe that the Chinese stocks would be a comfortable place to invest in.

Concluding Remarks

Looking ahead, the fate of ZH appears to be tied to the resolution of audit-related issues between the US and China. In the short term, the investors are expected to bear the brunt of market-related volatility, however, in the long run, investors could earn high returns from ZH.

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