The narrative around a founder can shift dramatically. Once lauded as a visionary, the same person can quickly face harsh criticism when their financial moves are scrutinized. This is the story of a founder whose company's stock soared and then collapsed, leaving retail investors feeling burned.

When GIGADEVICE made its debut on the STAR Market on July 27, its share price skyrocketed 465% on the first day, making it the highest-valued company on the A-share market. The founder was immediately celebrated as a "long-termist," a "ten-year champion," and "the most generous boss in A-shares." However, this positive sentiment quickly soured as GIGADEVICE's stock price began to fall, plunging from its all-time high of 846 yuan, wiping out over 300 billion yuan in market value. The founder, who had cashed out 4.4 billion yuan near the peak, announced a share buyback and personal stock purchase plan, sparking a public outcry. He was accused of having an "ugly" and "disgusting" strategy, with many calling his actions a textbook case of taking advantage of retail investors.

There are two distinct perspectives on this situation. One view sees it as a masterful piece of capital management and strategic communication. The other views it as a blatant exploitation of retail investors. To understand the full picture, let's review the timeline.

On April 8, a share reduction plan was announced, stating the founder intended to sell up to 11.21 million shares, representing 1.60% of total shares. The selling window was set for April 30 to July 29. On May 6, the very first day of the window, the memory chip sector rallied, and GIGADEVICE shares hit their daily limit. The founder executed his first sale right at the market's peak of excitement. Between May 11 and May 25, over 11 trading days, the stock price surged by 54%. During this period, the founder sold 6.33 million shares at an average price of 406.38 yuan, netting approximately 2.572 billion yuan. This was the most concentrated period of selling in the entire plan. By June 12, the sale was complete. In total, 11.11 million shares were sold for about 4.4 billion yuan, at prices ranging from 339.44 to 538.90 yuan. After the sale, his direct shareholding dropped from 6.53% to 4.94%.

On June 29, GIGADEVICE shares hit their all-time high of 846.66 yuan, with a market cap approaching 600 billion yuan. But on July 1, the stock began a sharp decline. On July 27, the day of the IPO for another chip company, GIGADEVICE shares hit their daily limit down. The following day, July 28, they saw another limit down. On July 29, the stock price hit another limit down intraday, closing at 364.03 yuan, a 57% drop from its peak, erasing over 300 billion yuan in market value. That same evening, the founder released a series of announcements. He disclosed the completion of his share sale, proposed a share buyback of 1 to 2 billion yuan (to be cancelled), pledged not to sell any shares for 12 months, and announced a personal share purchase of no less than 1 billion yuan starting December 13.

From the Critics' Perspective: Information Asymmetry and Unequal Benefits

The most glaring issue is the 4.4 billion yuan personal cash-out versus the 1 billion yuan personal stock purchase, a four-fold difference. The largest component of the "rescue" plan, the 1 to 2 billion yuan buyback, would be funded by all shareholders, not by the founder personally. Many retail investors feel the founder profited personally while asking other shareholders to pay for the stock support. Furthermore, the timing of the sales appears suspiciously precise. As a co-founder of two key companies, the founder would have intimate knowledge of the industry cycle and the listing schedule of the other company. His concentrated selling happened during the most intense 11-day rally, ending just 17 days before the stock peaked. This allowed him to exit just before the "shadow stock" premium from the other company's IPO was about to evaporate. While technically legal, the line between compliance and using information advantage seems blurred. Finally, the five-month gap between the sale and the promised purchase means there is no real capital supporting the stock during its most severe decline. The founder's promise to buy shares starting in December offers little comfort to panicked retail investors suffering through the current crash. The core accusation is that retail investors bought into a narrative of future value, while the founder cashed out before that narrative was fulfilled.

From the Founder's Perspective: Compliant and Rational Capital Management

From this viewpoint, every step was compliant, transparent, and reasonable. The share reduction plan was disclosed on April 8, executed within the specified window, and completed according to the rules. After the sale, the founder still controlled 6.80% of the company. An analysis of the selling price reveals a more nuanced picture. The founder sold his 11.11 million shares at an average price of about 396 yuan per share. His highest selling price was only 538.90 yuan. The stock's ultimate peak on June 29 was 846.66 yuan, which is 36% higher than his highest sale price. After the sale was completed on June 12, the stock price actually rose another 76% to hit its peak. This rally from 500 yuan to 846 yuan was the true speculative bubble driven by the hype around the other company's IPO. Those who bought in at 500 to 846 yuan and lost money in the July crash were essentially "chasing the peak." The 57% decline from 846.66 to 364.03 yuan mainly erased the valuation that was inflated after the founder had already left. Notably, the closing price of 364.03 yuan on July 29 is only 8% lower than the founder's average selling price of 396 yuan. The bubble formed and burst after his exit, not before it. Moreover, the rescue plan is seen as having substance. The buyback of 1 to 2 billion yuan shares is for cancellation, which directly increases per-share value. The 12-month no-sale pledge provides a safety net, and the personal stock purchase of at least 1 billion yuan is a significant commitment. This is a more responsible approach than that of founders who remain silent after cashing out. The five-month gap is not a delay tactic but a legal requirement. Chinese securities law prevents major shareholders (holding over 5%) from buying back shares within six months of selling. The founder's final sale was on June 12, so the earliest he can buy back is December 13. Finally, there is a rational argument for portfolio rebalancing. The founder holds a massive indirect stake in another major chip company, valued at over 79 billion yuan, and has also pledged to distribute 38 billion yuan worth of shares to employees. Re-allocating assets from a niche memory company to a main memory company is a rational financial decision. The founder has the right to manage his personal assets.

Ultimately, the situation is a clash of emotion and reason. Emotionally, the critics have a point. The market is already suffering from a severe tech stock downturn, with accounts shrinking and confidence shattered. A news story about a major shareholder cashing out 4.4 billion yuan feels like salt in a wound. The anger is understandable. Rationally, however, it's hard to argue that the founder acted illegally. A decade of hard work in the semiconductor industry has earned him the right to profit from his success. He disclosed his plan, followed the rules, and executed his strategy with textbook precision. The real focus now should be on two key things: first, the actual implementation of the 1 to 2 billion yuan share buyback. Will it be executed as proposed? Second, will the founder's personal share purchase of at least 1 billion yuan materialize after December 13? A promise is one thing; execution is another. The true test of his commitment will be whether he actually puts his own money on the line to support the stock price. That will determine if this is a genuine support effort or just a public relations exercise.