Chinese ride-hailing giant DiDi Chuxing, commonly called simply DiDi, has announced that it is delisting its shares from the New York Stock Exchange (NYSE). Its American depository receipts (ADRs) are listed on the NYSE under the name DiDi Global, Inc. (DIDI) and currently have a market capitalization in excess of $37 billion.
DiDi's initial public offering (IPO) on the NYSE took place on June 30, 2021, priced at $14 per share. The price has since sunk to around $7 per share. The IPO was widely publicized and attracted much interest from U.S. pension funds and various international investors.
- Chinese ride-hailing giant DiDi Chuxing is delisting its ADRs from the NYSE.
- It had a widely promoted IPO in June 2021, but its shares have tumbled since then.
- The Chinese government now is frowning upon foreign listings by Chinese companies.
Motivation for DiDi's Delisting
With the second-largest economy in the world and more than adequate sources of funding generated at home, as well as a growing ability to attract investors' money from abroad, China is less dependent on using U.S. and other foreign capital markets to raise money for its business enterprises. Meanwhile, the Chinese government is seeking tighter control over companies domiciled in China, and one way is to discourage listings on foreign exchanges such as the NYSE.
Additionally, distrust of China continues to run high in U.S. government circles. As a result, China's friends on Wall Street have seen their influence in Washington diminish.
Shortly after its IPO in the U.S. in late June, Chinese regulators banned Didi from app stores in China, claiming that it broke data privacy laws and posed cybersecurity risks. This spurred a collapse in its share price. The decision to target Didi was widely seen as retribution for its decision to go public outside China and an example of efforts by China to limit the power of big tech firms.
"Didi's repatriation to [Hong Kong] is a significantly worrying indicator for the larger U.S.-Sino economic relationship," observed Brock Silvers, chief investment officer (CIO) at Kaiyuan Capital in Hong Kong. "Beijing essentially forced Didi's hand."
"Didi's repatriation looks likely to be the start of a trend, and the market should expect that others will follow," Silvers added. "Equity investors may not wait for the other shoe to drop."