Didi denies it’s planning to leave Wall Street as stock jumps

Ride-hailing company Didi Global on Thursday denied a media report that the company was considering going private to placate Chinese authorities and compensate investor losses since listing in the US.

The Wall Street Journal, citing people familiar with the matter, reported that the Chinese company has been mulling delisting plans as a crackdown in China widens and it has received support from cybersecurity regulators.

Didi, which listed in New York last month after raising $4.4bn in an initial public offering, said the WSJ report wasn’t true.

“The company affirms that the above information is not true,” it said in a statement, referring to the report. “The company is fully co-operating with the relevant government authorities in China in the cybersecurity review of the company.”

Didi stock, which jumped as much as 40% to $12.42 in premarket trading after the WSJ report, pared gains after trading opened on Wall Street. The shares were quoted at about $10 a share, down 28% from the company’s listing on June 30.

Days after Didi’s market debut, the Cyberspace Administration of China (CAC) opened an investigation into the company and asked it to stop registering new users, citing national security and the public interest.

The regulator also said it would remove the mobile apps operated by Didi from app stores.

Didi’s listing was the biggest stock sale by a Chinese company since the 2014 listing of e-commerce behemoth Alibaba Group.

The action against Didi came soon  a month-long regulatory crackdown on China’s huge internet sector for antitrust, customer data privacy and other violations, which has rattled investors.

Beijing said earlier this month that officials from at least seven departments, including the CAC, the Ministry of Transport, and the State Administration for Market Regulation, were conducting an on-site cybersecurity review of Didi.

The CAC had been investigating whether some of the company’s data may have ended up in the hands of a foreign entity, given Beijing's sensitivity about usage of onshore data, sources told Reuters.

Didi has been in talks with bankers, regulators and key investors to try to resolve the problems after its listing on the New York Stock Exchange, the WSJ report said. (https://on.wsj.com/3ybFu4h)

The WSJ reported that Didi had asked its major underwriters to assess investors’ views regarding a privatisation plan, as well as the pricing range that they would accept.

A tender offer for its publicly traded shares is one of the preliminary options being considered, the WSJ report said.

Reuters