On May 21, Kuaishou-W (01024.HK) fell 3.06% in regular trading, trading at HK$46.24/share, with trading volume of HK$841 million. The stock has now erased all gains triggered by the Kling AI spin-off announcement and continues to break lower.

The decline extends a sustained pullback that began after Kuaishou confirmed on May 12 it was evaluating a plan to restructure Kling AI assets, potentially involving external financing at a reported USD 20 billion pre-IPO valuation. The stock initially surged as much as 11% on the news but reversed sharply after the company clarified the proposal remains at a preliminary stage with no binding agreements signed.

Market skepticism centers on two issues: management is in a quiet period ahead of its May 27 Q1 earnings release and cannot provide further details, and intensifying competition from ByteDance's Seedance and Alibaba's HappyHorse — the latter built by former Kuaishou VP Zhang Di, a core Kling AI architect who defected. With Kling generating only about 0.73% of group revenue yet commanding a valuation near 70% of Kuaishou's market cap, investors remain unconvinced the spin-off narrative alone justifies current levels.

(The above content is based on publicly available market information, generated by a program or algorithm, and is intended solely as a stock movement alert. It does not constitute investment advice or a basis for trading decisions.)