Shein Considers Restructuring Investor Costs for Hong Kong IPO Amid Lower Valuation Target, Report Says

Fast-fashion retailer Shein is considering a plan to lower the investment cost for some of its late-stage backers as it pursues a Hong Kong initial public offering at a reduced valuation, Bloomberg News reported Monday, citing people familiar with the matter.

Details of the Proposed Adjustment

The company may offer a combination of cash payments and additional Class B shares to investors who participated in its pre-Series D, Series D, and Series D+ funding rounds, according to the report. This move is designed to effectively reduce the cost basis for these investors, aligning their entry price with an anticipated IPO valuation of around $40 billion.

The specific amount of cash and shares offered would reportedly depend on the final valuation Shein achieves in its public listing. Deliberations are said to be ongoing, and no final decisions have been made.

Context and IPO Challenges

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The potential adjustment comes as Shein's valuation faces scrutiny. A lower-than-hoped-for IPO valuation would mean that investors who bought in at higher private market prices could face immediate losses on their positions. By adjusting their cost basis, Shein could keep these key stakeholders supportive of the public offering.

Shein's financial performance has added to the valuation pressure. The company recently reported a $99 million net loss for the first three months of the year. This marks a significant downturn from the $395 million net profit it recorded in the same period of 2025, raising questions about its growth trajectory and profitability ahead of the planned listing.

Shein did not immediately respond to a request for comment from Reuters, which was unable to independently verify the Bloomberg report.