China’s ride hailing giant Didi Chuxing to delist from NYSE, sell shares in Hong Kong
In a dramatic move, China’s answer to Uber, Didi Chuxing, said on Friday that it will delist from the New York Stock Exchange and seek an alternate listing in Hong Kong. The decision comes just six months after it raised $4.4 billion in what was seen as a blockbuster U.S. initial public offering in June.
The delisting move had been rumored for weeks and was first reported by Bloomberg News.
“After careful study, the company will start delisting on the New York Stock Exchange immediately and start preparations for listing in Hong Kong,” the company said in a brief statement on its Weibo account on Friday.
Didi has been under the gun for months as Chinese authorities made clear they have been displeased by the company’s behavior and was seeking to rein it in. Among other things, back in July, just days after Didi’s IPO, Chinese authorities groused that they had been taken by surprise by the company’s listing in New York.
A short time later, Beijing regulatory authorities announced that they would conduct a data-security review of the company, saying they were concerned that the company was not safeguarding their users’ privacy adequately.While that probe was underway Chinese regulators barred Didi from adding any new users and required the company to shutter some of its apps.
Didi’s actual announcement on Friday was short on details. The company didn’t say, for example, how precisely it planned to delist its shares from New York. One way might be to secure a listing elsewhere – which may be why the company said it plans to list in Hong Kong. Alternatively, the company could decide to take itself private, purchasing the outstanding public shares. Didi did not immediately return calls for comment.
Since 2019, more than a dozen Chinese companies – including tech giants like Alibaba Group Holdings – have begun to explore listings outside the U.S. Hong Kong has been a favored alternative. Beijing, for its part, has grumbled aloud about Chinese companies giving the U.S. regulatory authorities unfettered access to their books, saying that’s a threat to the mainland’s national security.
The concern, as Chinese authorities see it, is that internet companies like Didi hold sensitive information not just about their users but about China itself, so central authorities have sought to gain more control over them.
Washington has also been tightening standards for Chinese companies wishing to list in the U.S. On Thursday, the U.S. Securities and Exchange Commission adopted rules that would require Chinese companies listed in the United States to open their books to American accounting firms or risk being kicked off its stock exchanges.
Didi’s decision comes on the heels of a roster of proclamations from Chinese President Xi Jinping who has made clear he intends to assert more control over the nation’s tech companies. He has said he wants to create a private sector that hews to the Communist Party’s focus on “shared prosperity,” which allows the spoils of business to be more evenly distributed among the masses.