(Yicai) Dec. 29 -- Shares in Xiaomi tumbled as much as 3.3 percent today shortly after the Chinese tech giant’s co-founder and vice chairman announced plans to sell USD2 billion worth of shares over a four-year period to set up an investment fund.

Xiaomi's stock price [HKG:1810] closed down 1.6 percent at HKD38.58 (USD5). Earlier in the day, the shares slumped 3.3 percent to HKD37.94 before rebounding into positive territory, with an intraday high of nearly 2 percent.

Lin Bin is preparing to sell up to USD500 million worth of Class B ordinary shares every 12 months starting December next year, with a total cap of USD2 billion, Xiaomi said yesterday.

Xiaomi's stock price showed some volatility after the plan was announced. However, since the sell-off won’t start for another year, the short-term impact on the stock price is expected to be limited, Wu Lixian, international securities strategist at Everbright Securities, told Yicai. Hong Kong-listed tech stocks tend to move with the broader market, so future performance will depend on the macroeconomic environment, he added.

57-year-old Lin co-founded Xiaomi with Chairman and Chief Executive Officer Lei Jun in 2010 and has served as president and vice chairman. Since Xiaomi went public in Hong Kong in 2018, Lin has sold shares several times. He cashed out around HKD370 million (USD47.6 million) in August 2019, about HKD8 billion (USD1 billion) in September 2020 and roughly HKD180 million in June last year.

As of June 30, Lin still held approximately 2.2 billion shares in the Beijing-based firm, accounting for 8.3 percent of Xiaomi’s total share capital, according to the company’s semi-annual report. This makes him the second-largest shareholder after Lei.

Lei, on the other hand, bought HKD100 million (USD12.9 million) worth of Xiaomi’s shares in November, increasing his holdings by 2.6 million shares and hiking his stake to 23.3 percent. This purchase took place after Xiaomi's stock price tumbled to a nearly seven-month low of HKD36.62 (USD4.71) during intraday trading on Nov. 21.

Editors: Dou Shicong, Kim Taylor