DiDi Global (DIDI) to Exit U.S. Exchange, List in Hong Kong

DiDi Global’s DIDI tenure as a U.S.-listed company turned out to be rather short. Barely five months after its debut as a publicly-traded company in the U.S. stock market, this Beijing-based ride-hailing giant announced its decision to get delisted from the New York stock exchange and pursue a listing in Hong Kong.

Per the press release, DIDI’s board authorized its management to undertake necessary procedures and file the relevant application(s) for delisting its ADSs from the New York Stock Exchange. At the same time, it is to be ensured that ADSs get converted into freely tradable shares of DiDi Global on another internationally recognized stock exchange. The board also authorized DIDI to pursue a listing of its class A ordinary shares on the Main Board of the Hong Kong Stock Exchange.

The decision to pull out of the New York Stock Exchange and shift to Hong Kong is probably due to the crackdown by Chinese regulators on firms including DiDi Global on issues regarding cybersecurity as China aims to tighten its control over internet data to safeguard national security.

DiDi Global went ahead with its U.S. IPO on Jun 30, ignoring requests by the Chinese regulators to put the same on hold. We remind investors that DIDI had raised $4.4 billion from its U.S. IPO. However, the stock lost value after the Cyberspace Administration of China ordered the removal of its app (Didi Chuxing) from the country’s app stores following its IPO.

The internet controller of China attributed this decision to detecting some grave issues that emanated from Didi Global's usage of customers' personal information. The crackdown by the Chine regulatory authorities wiped off billions of dollars of DIDI’s valuation.

DiDi Global’s latest move to delist in the United States implies that it finally gave in to the demands of China and bowed to its governmental pressures. Significantly, the Chinese government had opposed DIDI’s decision to trade publicly in the U.S. stock market.

DiDi Global is known as the “Uber of China”. DIDI bought Uber’s UBER China operations in 2016. Uber went public in the United States in May 2019. UBER’s IPO price was $45. During the process, UBER issued and sold 180 million shares of its common stock.

Despite worries over the newer variants of coronavirus, Uber’s mobility business is improving. In October, Mobility gross bookings crossed $44 billion annual run rate, reflecting a rise of 14% month over month. This accounts for an 85% recovery from the October 2019 (pre-pandemic) levels. UBER expects total gross bookings to be $25-$26 billion in the fourth quarter, indicating 46-52% growth from the prior-year reported number.

Another prominent ride-hailing company in the United States is Lyft LYFT. LYFT made its trading debut on the Nasdaq in March 2019. Its IPO price was $72 a share.

Lyft's performance improved sequentially over the last few quarters, courtesy of the recovery in ride volumes. LYFT’s forecast for the fourth quarter of 2021 is encouraging. Revenues for the period are expected to rise 63-65% from the year-earlier reported figure.

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