DiDi de-lists and heads home in disgrace

Last Friday shares in DiDi Global, China’s answer to Uber, underwent “extraordinary” swings before ending the day down by 22%, says Bloomberg. The moves were triggered by DiDi’s announcement, seemingly on the orders of Beijing, that it would switch its listing to Hong Kong from New York just five months after floating. To make matters worse DiDi’s 127-word statement was widely criticised for leaving investors “groping for answers” by providing “few details on the mechanics of changing its listing and the potential implications for shareholders”.

The de-listing is the latest twist in a “fast fall from grace” for a company “once hailed as an innovator and disrupter in China’s staid transportation sector”, says Alexandra Stevenson and Paul Mozur in The New York Times. Its listing seems to have incurred the wrath of Chinese regulators, says Laura He on CNN. Shortly after DiDi floated, Beijing said it would ban the firm from app stores in China as “it broke privacy laws and posed cybersecurity risks”. The shares have halved since the listing as the group became “a poster child of China’s efforts to rein in what the government sees as unruly Big Tech firms”.

Shareholders still need to approve the de-listing, says the Financial Times. Despite this, the vote is likely to be considered a formality as it is almost certain that investors, including SoftBank, Sequoia and Tencent,“won’t dare to protest” against the orders of China’s government. Ironically, the company may be forced to look to Hong Kong even though the city’s “more stringent requirements” for firms “to be fully compliant with local laws” were a “key hurdle that pushed DiDi to the US in the first place”.