CAOCAO INC (HKG:2643), the Geely-backed ride-hailing platform, saw its shares plummet 17.26% in its trading debut on the Hong Kong Stock Exchange on Wednesday. This sharp decline comes just after the company raised HK$1.72 billion in net proceeds from its initial public offering (IPO).

The company had priced its IPO at HK$41.94 per share, which was in line with the guiding price. The Hong Kong public offering was heavily oversubscribed, being 21.14 times oversubscribed, which led to a reallocation of shares from the international offering. The international offering itself was 2.78 times subscribed.

While the strong subscription rates initially seemed promising, the significant drop in share price on the first day of trading suggests that investors may be reassessing the company's valuation or expressing concerns about the broader market conditions for tech and ride-hailing companies. It's not uncommon for newly listed stocks to experience volatility in their early trading days as the market determines a fair value for the shares.