The company’s stock values have crashed decisively.
Last year, Chinese ride-hailing company Didi debuted on the New York Stock Exchange with a record-breaking $4.4 billion IPO. The IPO attracted many investors in the United States, and the company seemed to be a herald of efforts from Chinese companies to go multinational. Unfortunately, not long after going public, it was hit with a severe cybersecurity probe from the Chinese government, forcing its removal from app stores and submission to an ongoing investigation.
Didi has spent the past year in a financial death spiral as billions of dollars were wiped off of its valuation. The company announced back in December that they were planning on leaving the NYSE, though no precise reason was cited for doing so. This morning, after a vote between its shareholders, the delisting process was formalized. The company will be filing the requisite paperwork with the US Securities and Exchange Commission to delist on or before June 2.
“This news is well anticipated and is sort of a relief rally,” Brendan Ahern, chief investment officer at Krane Fund Advisors LLC, said in a note obtained by Bloomberg. “The move is in order to allow its regulatory overview to take place, which then begs the question if and when the company could relist and there’s been talk about the company potential re-listing 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 brief time of high valuation, Didi had numerous high-profile buyers, including SoftBank Group Corp., Tencent Holdings Ltd. and Uber Technologies Inc. At the time of writing, these companies have not clarified whether or not they intend to sell off their stakes in the company. As for outstanding shares, should they be relisted on the Hong Kong Stock Exchange, they are expected to be relegated to the high-risk investment categories.