Kuaishou-W stock experienced a significant intraday plummet of 5.03% on Thursday, extending a multi-session decline.

The drop continues a sustained pullback that began after the company confirmed it was evaluating a plan to restructure its Kling AI assets, potentially involving external financing at a reported $20 billion pre-IPO valuation. While the initial announcement triggered a surge, the stock has since reversed sharply as the company clarified the proposal remains at a preliminary stage with no binding agreements signed.

Market skepticism centers on several key issues. Management is in a quiet period ahead of its upcoming quarterly earnings release and cannot provide further details. Furthermore, Kling AI faces intensifying competition from rivals like ByteDance's Seedance and Alibaba's HappyHorse, the latter built by a former Kuaishou VP and core Kling AI architect. With Kling generating only about 0.73% of group revenue yet commanding a valuation near 70% of Kuaishou's total market capitalization, investors remain unconvinced the spin-off narrative alone justifies current stock levels.