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Didi Global tumbled in US premarket trading on Monday after the ride-hailing giant said it is planning to delist its US-traded shares before it finds a new venue for the stock. The company also reported that its quarterly loss almost doubled.

Didi’s American depositary receipts sank as much as 24% to $1.88 in early trading after Didi set an extraordinary general meeting for May 23 to vote on delisting its shares from the New York Stock Exchange. While the company will continue to explore listing on another internationally recognised exchange, Didi said it will not apply until after the US delisting is finished.

“Although investors were well aware that Didi Global intended to delist, the manner of delisting has taken investors aback,” said Gary Dugan, CEO at the Global CIO Office. 

Separately, Didi reported that its fourth-quarter net loss widened by 95% from a year earlier to 383-million yuan on a 13% decline in revenue to 40.78-billion yuan.

Didi has plunged 82% since going public last June, wiping out $56bn in market value. The Chinese government was angered by Didi’s US listing and days later launched a cybersecurity probe and forced its services off domestic app stores. The agency in Beijing responsible for data security was later said to have asked Didi’s top executives to devise a plan to delist because of concern sensitive data may leak. 

In March, the company suspended preparations for its planned Hong Kong listing after the Cyberspace Administration of China informed executives that their proposals to prevent security and data leaks had fallen short of requirements, Bloomberg News reported. 

Investors had remained optimistic after Beijing regulators modified a decade-long rule that restricted financial data sharing by offshore-listed companies. The move could help US regulators gain full access to auditing reports of the majority of the 200-plus Chinese companies listed in New York. 

“The Didi news only adds to poor news from China, undermining any hopes for a sustained rally,” Dugan said. “International investors will once again be put off rebuilding weighting in Chinese equities.”

Bloomberg News. More stories like this are available on bloomberg.com


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