In the previous year, Didi, a Chinese ride-hailing firm, made a remarkable debut on the New York Stock Exchange through a $4.4 billion IPO. The IPO drew significant interest from investors in the United States and indicated a trend for Chinese companies seeking international expansion. However, shortly after becoming public, the company faced a serious cybersecurity investigation from the Chinese government, leading to its removal from app stores and initiation of a probe process.
Over the past year, Didi faced a financial downturn with billions of dollars being wiped off its valuation. In December, the company announced its intention to withdraw from the NYSE without specifying a concrete reason. Following a shareholder vote, the delisting procedure was confirmed earlier today. Didi will soon submit the necessary paperwork to the US Securities and Exchange Commission for the delisting to occur by June 2.
Brendan Ahern, the chief investment officer at Krane Fund Advisors LLC, stated, “This news was expected and is somewhat of a relief rally.” He also mentioned that the move was necessary for regulatory scrutiny and raised questions about a potential relisting on the Hong Kong stock exchange.
Didi Global’s shareholders approved the Chinese ride-hailing giant’s delisting from the New York Stock Exchange, as the company seeks to resolve a cybersecurity probe in China https://t.co/sw5zos6A53
— The Wall Street Journal (@WSJ) May 23, 2022
In its heyday of high valuation, Didi attracted prominent investors such as SoftBank Group Corp., Tencent Holdings Ltd., and Uber Technologies Inc. Presently, these companies have not disclosed their plans regarding potentially divesting from Didi. If Didi is relisted on the Hong Kong Stock Exchange, its shares are likely to fall under high-risk investment categories.
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