The Chinese ridesharing company is withdrawing from the western market.
Several months ago, Didi, a Chinese ridesharing company, made its debut on the western stock market with an IPO that raised $4.4 billion. However, the IPO faced a setback when Beijing did not approve it and banned Didi from Chinese app platforms, leading to a significant setback for the company’s western market ambitions.
As a result, Didi’s stock value has plummeted by half since its IPO launch, translating to a market capitalization loss of around $30 billion. With dwindling profits and regulatory pressures from Beijing, Didi has made the strategic decision to withdraw. Today, Didi announced its intention to delist from the New York Stock Exchange, indicating a shift towards focusing on the Chinese market exclusively.
“After careful consideration, the company has decided to initiate the delisting process from the New York Stock Exchange and prepare for a listing in Hong Kong,” the company stated on their Weibo page, a popular Chinese social media platform.
Didi’s board of directors will convene a shareholder meeting to vote on the delisting proposal at a later date, following the necessary protocols.
Didi, the Chinese ride-hailing giant, will remove its shares from the New York Stock Exchange, announced on Friday, shortly after raising substantial funds through an IPO.
This sudden move underscores a stark reality for Wall Street: China’s diminished reliance on it. https://t.co/zn7QKcUQTb
— The New York Times (@nytimes) December 3, 2021
Following Didi’s delisting announcement, other major Chinese firms listed in the U.S. also experienced declines in their stock prices. E-commerce giant Alibaba witnessed a 3% drop in value, while gaming and music company NetEase saw a decrease of 5.4%.
“This development further taints Chinese tech stocks, which are grappling with significant regulatory hurdles both domestically and globally,” remarked Daniel Ives, managing director and senior equity analyst at Wedbush Securities, in a statement to CNN. “Investors remain wary of Chinese tech stocks, and the Didi situation serves as a cautionary tale.”
