Chinese ride-hailing giant Didi’s shareholders voted to delist the company from the NYSE. The decision is the long-awaited result of the company running into trouble with the Chinese government after a rushed and later unsettled debut in the US public market.
Didi went public in mid-2021 in an offer that came together quickly. After the IPO in June, early July, Marketingwithanoy already signaled problems between the newly launched company and the Chinese government.
The Chinese Communist Party, believed to have been annoyed by data concerns, ran a regulatory push at the time, making Didi’s foreign IPO all the less palatable. Shortly after the listing, Didi had to stop accepting new user registrations, among other legal sanctions.
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The company’s subsequent suffering was absorbed by its new investors after the IPO. After listing at $14 a share and trading as low as $18.01 per Yahoo Finance data, Didi’s stock recently hit a low at $1.37. Today, the company is worth $1.56 a share, up 4% on news of its impending delisting.
Per filings with the U.S. Securities and Exchange Commission (abbreviated):
[Didi] announced today that the following resolution, which was submitted for shareholder approval, has been approved at the company’s extraordinary shareholders’ meeting held today in Beijing: as an ordinary resolution, to delist the American Depositary Shares of to delist the company from the New York Stock Exchange and that, in order to better cooperate with the cybersecurity assessment and rectification measures, the company’s shares will not be listed on any other stock exchange until the delisting is complete.
The company is expected to list in Hong Kong after it is delisted from US markets, but when that could happen is not clear.
What’s remarkable or perhaps ironic about the timing of Didi’s delisting is that it seems to have reached the worst on both sides. Recall that Ant’s failed IPO in late 2020 was the unofficial kick-off of a regulatory crackdown by the Chinese Communist Party on its domestic technology market. A wave of changes was announced, from video game restrictions to the elimination of the profitable edtech market and more.
But after years of punishment, China’s technology market is losing staff and value as the ruling government tries to smooth the waters somewhat. In simpler terms, Didi quickly went public in the United States after the government began curtailing the company and its colleagues, and is now off the market just as the Chinese government is trying to change its tone on its tech economy. change.
Deputy Prime Minister Liu He made noise last week about “signs of easing” [China’s] crackdown on the technology sector that has wiped out billions of dollars in value from its most prominent companies,” as CNBC put it. They came too late for Didi. How will other companies fare?