Shares of Meitu (1357) slumped 6.6 percent to below its listing price of HK$8.50 with the lock-up period for 40 percent of issued stock for China's most popular beauty-enhancing selfie app expiring this month.
The end of the lock-up means many shares held by investors who backed the company before its initial public offering in Hong Kong will flow into the market.
The new stock included five kinds of preference shares to attract investors before the IPO.
Of its 21 shareholders, the five biggest controlled 56 percent of its stock. And there were claims the 21 sold 66 million shares at its HK$8.50 listing price in a bid to raise US$72 million (HK$560.1 million).
But the shares dropped 9.1 percent after MSCI reversed course and decided not to include Meitu in its global indexes last month.
Trading in Meitu has been marked by wild swings since the company went public. On March 20 the stock rose as much as 28 percent over the course of the day before tumbling in late trade to close 11 percent lower.
Shares can be traded through the Hong Kong-Shanghai-Shenzhen exchanges links.