Didi delisting: Chinese company says it will leave New York ‘immediately’ and list in Hong Kong after IPO

news7g12/03/2021

3 2 minutes read

“After thorough research, the company will commence delisting on the New York Stock Exchange immediately and begin preparations for listing in Hong Kong,” the Chinese ride-hailing company wrote on Friday. verified account on Weibo, a popular Twitter-like platform in the country.

In a separate statement in English, the company said its board of directors has authorized the company to file for a delisting in New York, while ensuring that its shares “will be converted to free stock.” company’s trading on an internationally recognized stock 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 a $4.4 billion IPO in the United States – a decision that turned out to be a failure for the company. Its share price tumbled as Beijing cracked down on the company, announcing shortly after it made an offer that it would ban Didi. from app stores in China because it violates privacy laws and poses a cybersecurity risk.

The company’s stock is now worth about half of its $14 IPO price, losing nearly $30 billion in market capitalization.

Beijing’s decision to target Didi is seen by many as punishment for its decision to list shares abroad, and the company has become a poster child of China. efforts come curb what the government sees as unruly Big Tech companies. In the weeks following the IPO, Chinese authorities proposed that companies with data on more than a million users seek approval before listing abroad.

There have also been signs recently that Didi will leave New York. Last week, Bloomberg reported, citing anonymous sources, that the Cyberspace Administration of China asked top Didi executives to plan to do that.

China's Xi Jinping listed his pet stock exchange in Beijing

The pressure on Chinese companies doing business in the United States doesn’t just come from Beijing. Washington has also tightened its grip on companies from the world’s second-largest economy. On Thursday, the US Securities and Exchange Commission finalized rules that would allow it to remove foreign companies that refuse to open their books to US regulators. For years, China has denied US audits of its companies, citing national security concerns.

The new rules could have widespread consequences for many Chinese companies doing business in the United States, including Alibaba (TORTOISE), JD.com (JD) and Baidu (BIDU). All three companies already do business in Hong Kong.

Chinese tech companies were shaken by Friday’s news from Didi. E-commerce firm JD.com fell more than 7%, while Alibaba lost 5%. Baidu fell 3.6%. Online music and games company NetEase, also in New York, fell 8%.

CNN’s Beijing office contributed to this report.

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