Strike while the iron is hot? Reports say that negotiations for the sale of shares in Xiaohongshu (Little Red Book) to shareholders are at a valuation of at least $200 billion.

As the deadline of the TikTok ban in the US approaches on January 19th, the mainland social platform Xiaohongshu has suddenly become a "refugee camp" for many American TikTok users. It has been reported that the major shareholders of Xiaohongshu are in discussions to sell off their shares at a valuation of at least $20 billion (approximately HK$156 billion), with companies like Tencent (00700) showing interest in taking over. According to sources, investors such as GGV Capital, GSR Ventures, and TIAN TU CAPITAL are selling off part of their shares, with existing shareholders such as Sequoia China and Hillhouse Fund also interested. Tencent is also considering acquiring more shares. If the above transactions are successful, it will push Xiaohongshu's valuation back to its peak level in 2021 and boost its prospects for an initial public offering (IPO). Industry estimates suggest that the company could IPO as early as this year, depending on market conditions. However, the report states that the transaction has not yet been finalized, and many existing shareholders have the right of first refusal. If potential buyers decide to wait and see, especially considering the uncertain situation with TikTok, the negotiations could still break down. Xiaohongshu is considered one of the few viable alternatives to TikTok and became the most downloaded free app on the iOS platform this week.