Business

Didi shares plunge 44%, leaving SoftBank and Uber with weak profits


Cheng Wei, president and chief executive officer of Beijing Xiaoju Keji Didi Dache Co., stopped by the Boao Forum Annual Meeting for Asia in Boao, China, on Wednesday, March 23, 2016. The annual event sees business and political leaders get together and runs from March 22-25.

Qilai Shen | Bloomberg | beautiful pictures

Didi shares fell 44% on Friday, the biggest one-day drop since the Chinese ride-hailing company launched public in the US in June.

The stock is now 87% below its IPO price, leaving its top two shareholders – SoftBank and Uber – face a high probability of loss.

In December, stocks were in free fall amid a crackdown by the Chinese government on domestic companies listed in the US. On Friday, Bloomberg reported that Didi failed to comply with the data security requirements necessary to conduct a share sale in Hong Kong.

Softbank owns about 20% of Didi’s shares. The Japanese conglomerate’s stake is now worth about $1.8 billion, down from nearly $14 billion at the time IPO time. About 12% of Uber’s shares have fallen from more than $8 billion in June to just over $1 billion today.

Uber acquired a stake in 2016 after selling its China business to Didi. Uber said in the most recent time annual report that in 2021, the company records an unrealized loss of $3 billion on its Didi investment.

The hole is deepening and reflects a broader windfall for the technology sector, which is being brought to the mass market.

Read more about electric vehicles from CNBC Pro

Earlier this week, database software maker Oracle tell its investments In Oxford Nanopore and the Ampere Calculator pull profits down in the third fiscal quarter about 5 cents a share. And electric car maker Riviancounted Amazon as a top investor, fell 8% on Friday after Disappointing forecast and is now down 63% this year.

For SoftBank, Didi is one of 83 companies backed by the bank through its original Vision Fund. Last year CNBC reported that SoftBank sold part of the Uber position to cover the loss to Didi.

“Since we invested in Didi, we’ve seen a massive loss of value,” Masayoshi Son, SoftBank’s chief executive, said on a call in February to discuss results for the nine months ended. ends on December 31.

SoftBank shares fell 6.6% to close, while Uber rose 1.2%.

Didi wasn’t the only Chinese tech stock to fall on Friday, although its drop was the biggest. E-commerce site Alibaba Group and JD.com as well as an electric car manufacturer Nio all reduced like the fear returns in relation to companies with dual listings in the United States and Hong Kong.

WATCH: Blueshirt Group’s Gary Dvorchak Discusses Didi . Stock’s Fall



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