Is Didi Global Going Private?

Is Didi Going Private

Reports suggest that China’s largest ride-hailing service DiDi Global will go private to appease investors and domestic authorities amid cybersecurity investigations.

On July 29, 2021, the Wall Street Journal released a report stating that DiDi Global, the largest Chinese ride-hailing giant, is considering going private to appease Chinese authorities. The report noted that they are doing so to repay their investors for losses incurred in June after its overseas IPO debut. On June 30, DiDi raised US$4.4 billion in an IPO in the US. However, right after going public, the Cyberspace Administration of China (CAC) declared a data-related cybersecurity investigation into DiDi, causing DiDi’s shares to crash. Investors and founders of the company lost millions in wealth.

As of now, the app is facing a temporary ban and cannot take on any new users. This comes after DiDi went public in the US despite China advising against it. DiDi has nearly 500 million active users and provides over 10 billion rides a year. Beijing’s authorities expressed concerns about the company mishandling and sharing its users’ data. A regulator told Reuters that the app has “serious violations of laws and regulations pertaining to the collection of personal information.” Besides security concerns, the app also came under fire for lacking transparency. Reports found that DiDi abused its algorithms to unevenly divide the money from a passenger’s bill, leaving drivers with a small amount. In keeping with that, the app has released a new feature providing drivers with a detailed breakdown of their income.

DiDi’s shares are down by nearly 30% since the investigation. In light of this, the WSJ report suggested that the company will go private. However, in a social media statement, the company responded to the report denying the claim. The statement said, “The company affirms that the above information is not true. The company is fully cooperating with the relevant government authorities in China in the cybersecurity review of the company.”

After the WSJ report, the company’s shares rose by nearly 50%. However, since it declared that the report wasn’t accurate, Didi’s shares fell by a third.

Currently, the company is focusing on pacifying its domestic authorities. As per reports, DiDi is planning on collaborating with Westone Information Industry Inc., the state-owned information security firm, to monitor and manage its data. Westone is the designated authority to prevent data breaches in companies.

Despite the antitrust claims and temporary bans, retail investors in the US are still investing in DiDi.  A strategist from JP Morgan noted, “Retail investors appear to have behaved in a contrarian fashion by seeing [the] dip in Chinese stocks as [a] buying opportunity.” They have become dip-buyers who buy a stock when its price is low so that they can profit when the market rebounds. It is risky, and according to retail investors, worth it. Analysts feel that DiDi’s shared mobility business model makes it appear as a lucrative investment for the future.

Despite the many speculations, whether DiDi goes private or remains public is yet to be confirmed.

Header Image Courtesy: Unsplash

SHARE THIS STORY

Share on facebook
Share on twitter
Share on linkedin
Share on email

RELATED POSTS

Shrinkflation

What Is “Shrinkflation” and Why Opting For It Isn’t Companies’ Only Choice

You might have noticed grocery prices are soaring, or your usual go-to pack of chips is shrinking in size—all thanks to massive inflation. As of August 2022, the U.S. consumer price index (CPI), which measures the change in consumer prices for a specific set of goods over a period, has increased by 8.3% (year-on-year). Although it has gone down slightly from 8.6% in May, the highest it has ever been since 1981, it remains high and worrying.

Top 3 Affordable and Little-Known Smartphones to Bring Home in 2022

Top 3 Affordable and Little-Known Smartphones to Bring Home in 2022

Apple has remained at the center of the smartphone industry for years. The sleek, striking design, ever-improving chip and robust camera system of the iPhone have made it one of the most sought-after smartphones in the world. This month, Apple cemented and extended its lead in the industry by putting forward the next generation of iPhones.

5 More Business Podcasts You Need to Listen To

5 More Business Podcasts You Need to Listen To

Entrepreneurs have one thing in common—they always look for opportunities to learn and grow. To gain an understanding of running a viable business, you need to listen to the experiences of those who have emerged triumphant in the business world. A great way to do so is by tuning into a vast number of business and entrepreneurship podcasts scattered across the internet today.

5 Hobbies To Maximize Your Entrepreneurial Drive

5 Hobbies To Maximize Your Entrepreneurial Drive

Entrepreneurs are a special breed of person. They’re go-getters, risk-takers and dreamers. Yet, even the most driven entrepreneur needs to take a break from time to time. Spending every second of your day on your business is stressful, and you will lose your drive very soon. If you want to stay energetic and ready to take on new challenges at work, hobbies are what you need.

Making the Metaverse a Force for Good with the Metaverse Charity Foundation

Making the Metaverse a Force for Good with the Metaverse Charity Foundation

If you are a frequent reader of our website, you must have seen us mention The Sandbox, Decentraland and Axie Infinity. These are some of the most popular metaverses out there, and the one thing they all have in common is that they all have their origins in Asia. While Asia is home to all these metaverse projects, it suffers two main issues: the region has major rural-urban inequality as well as a significant wage difference between high-skilled and low-skilled occupations.

How Do Stores Get You to Spend More Money

How Do Stores Get You to Spend More Money?

Have you ever entered a grocery store to buy some milk but ended up with a bag full of items you didn’t even need? You’re not alone if you feel guilty for spending more money than you intended. It’s not our fault that we keep putting items in our shopping carts; we are manipulated to do so! To make sure you buy more, retailers will go all the way to carefully engineer every aspect of their store.