Didi delisting: Chinese company announces that it will leave New York “immediately” and list in Hong Kong after the IPO

0


“After a thorough study, the company will immediately begin to withdraw from the New York Stock Exchange and begin preparations for its listing in Hong Kong,” the Chinese rideshare company wrote on Friday on its verified account on Weibo, a platform popular Twitter type. in the countryside.

In a separate statement in English, the company said its board of directors authorized the company to file for delisting in New York, while guaranteeing that its shares “will be convertible into freely tradable shares of the company in another. internationally recognized action. exchange. “

The board of directors has authorized Didi to list its shares in Hong Kong, the statement added.
The announcement comes just five months after Didi launched his blockbuster, a $ 4.4 billion IPO in the United States – a move that turned into a fiasco for the company. Its share price slumped when Beijing cracked down on the company, shortly after the offer said it would ban Didi from app stores in China because it violates privacy laws and poses risks to the company. cybersecurity.

The company’s shares are now worth about half of its IPO price of $ 14 per share, a loss of nearly $ 30 billion in market capitalization.

Beijing’s decision to target Didi has been widely seen as punishment for its decision to go public abroad, and the company has become an illustration of China’s efforts to curb what the government sees as big tech companies. undisciplined. In the weeks following the IPO, Chinese officials proposed that companies with data on more than one million users seek approval before listing overseas.

There have also been recent signs that Didi will be leaving New York. Bloomberg reported last week, citing anonymous sources, that the Chinese Cyberspace Administration has asked top leaders in Didi to come up with a plan to get there.

News of Didi’s decision to step down from the list has sent shock waves through Chinese social media. Friday noon was one of the hottest topics on Weibo, with articles about the company attracting more than 120 million views.

A long article written by a Weibo user called the deregistration “severe punishment” for Didi, the result of the “iron fist of socialism”. The post – among the most popular on the subject – attacked Didi’s international investors, including Softbank (SFTBF) founder and CEO Masayoshi Son, of which Vision Fund is a major shareholder.

The person wrote that she was “sad” about the “misfortune” faced by Didi executives, but angry about their relationship with foreign investors.

“They could stand up straight, but they tended to crawl under the feet of foreign capital,” the person wrote.

Softbank shares fell 0.7% in Tokyo on Friday. The stock had plunged 5% at the end of last week after Bloomberg announced the potential delisting of Didi.

The pressure on Chinese companies doing business in the United States is not just coming from Beijing. Washington has also tightened the screws on companies in the world’s second-largest economy. The U.S. Securities and Exchange Commission on Thursday finalized rules that would allow it to deregister foreign companies that refuse to open their books to U.S. regulators. China has for years rejected US audits of its companies, citing national security concerns.

The new rules could have widespread consequences for many Chinese companies that do business with the United States, including Ali Baba (BABA), JD.com (JD) and Baidu (BIDU). These three companies are already doing business in Hong Kong.

Chinese tech companies were shaken by Friday’s Didi news. E-commerce company JD.com plunged more than 5%, while Alibaba lost 3%. Baidu also lost 3%. Online music and games company NetEase, which also operates in New York City, slipped 5.4%.

“This is just another black eye for Chinese tech stocks, which continue to face many regulatory challenges both domestically and internationally,” said Daniel Ives, managing director and senior equity analyst. at Wedbush Securities. “The Street remains very diverse among Chinese tech stocks, and this situation of Didi is another uplifting tale.”

CNN’s Beijing office contributed to this report.


Share.

Comments are closed.