Tuesday, March 21, 2023
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China App Giant Didi Plans US Stock Market Exit

Didi Global, a Chinese ride-hailing company, has announced plans to delist from the New York Stock Exchange (NYSE) and list in Hong Kong.

Since its launch in the United States in July, the company has been under intense scrutiny.

Beijing vowed a crackdown on technology businesses that list overseas just days after their initial public offering (IPO).

The US Securities and Exchange Commission (SEC) announced stringent new regulations for Chinese companies that list in the United States earlier on Thursday.

The business claimed on Weibo, China’s Twitter-like microblogging network, that “after rigorous investigation, the company will immediately begin delisting from the New York stock market and begin preparations for listing in Hong Kong.”

Didi stated in a separate English-language statement that its board had authorized the move, and that “at an appropriate time in the future, the firm will organize a shareholders meeting to vote on the aforementioned item, following proper processes.”

Didi, China’s counterpart to Uber, raised $4.4 billion (£3.3 billion) in its New York IPO at the end of June.

However, investors considered concerns about tensions between Washington and Beijing, as well as objections highlighted by US authorities about some Chinese corporations’ financial disclosures, on the opening day of trade.

Within days, China’s internet regulator ordered online businesses to stop selling Didi’s app, claiming that it improperly acquired personal data from customers.

The Chinese Cyberspace Administration (CAC) stated it was looking into the company to safeguard “national security and the public interest.”

“The business will endeavor to fix any faults, strengthen its risk prevention knowledge and technology skills, protect users’ privacy and data security, and continue to deliver secure and easy services to its consumers,” Didi stated in a statement in response.

Didi also stated that removing its app from Chinese app stores will have a negative impact on revenue.

Regulators in the United States and Europe have put pressure on Didi, as they have on many other Chinese technology businesses.

The US Securities and Exchange Commission announced on Thursday that it has finalized guidelines that would allow US-listed international businesses to be delisted if their auditors do not comply with authorities’ demands for information.

After Chinese officials consistently rebuffed demands from US authorities to check the finances of Chinese enterprises that list and trade in the US, the law was approved in 2020.

Meanwhile, a business insider informed the BBC in August that plans to debut in the UK and continental Europe had been shelved.

It had intended to launch services throughout Western Europe, including major British cities.

With a stake of more over 20% in Didi, Japan’s SoftBank is the company’s largest single investor. Alibaba and Tencent, two Chinese technological behemoths, are also on board.

As a consequence of Didi’s acquisition of Uber China in 2016, Uber now owns an interest in the company.

Since debuting on the New York Stock Exchange, Didi Global shares have lost more than 40% of their value.

Bob Carlson
Bob Carlson
Bob Carlson is a business journalist, with over a decade of experience in the trenches of reporting up-to-date business news for publications all over the world. With a wealth of knowledge at his back, Bob strives to bring the most important insights into the business world for TheOptic daily.
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