Shein discloses FTC probe as it targets $40 billion HK IPO

Shein disclosed a US Federal Trade Commission probe into its US business, its first such disclosure, as it pursues a Hong Kong listing valued above $40 billion.

The fast-fashion retailer said in listing-hearing documents it is actively cooperating with the FTC and may reach a settlement, though it cannot predict the outcome or timing of any announcement. The company did not specify the subject of the probe.

Shein may need to pay significant sums related to the investigation, which could materially and adversely affect its financial position and operating results, the company said. It plans to raise between $2 billion and $3 billion in the offering, foreign media reported.

The disclosure adds regulatory uncertainty to a listing that would value the retailer above $40 billion. Shein passed the listing hearing of Hong Kong Exchanges & Clearing (00388.HK), which rose 0.784 percent on the day.

The probe targets Shein's largest market, where the retailer has built a direct-to-consumer business selling apparel to US shoppers. A settlement or penalty could weigh on the valuation investors assign to the company ahead of its debut, and Shein has not ruled out that results may emerge in the near term.

The offering would rank among Hong Kong's largest listings in recent years, testing institutional demand for a retailer navigating regulatory risk in the US. Investors will watch the offer price and first-day trading to gauge appetite for the shares.

This article is for informational purposes only and does not constitute investment advice.