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Didi says goodbye to the New York Stock Exchange

The shareholder’s approval clears the way for the company to work with Chinese regulators, who are seeking a review of…

By admin , in news , at May 23, 2022

The shareholder’s approval clears the way for the company to work with Chinese regulators, who are seeking a review of its data systems. This will allow the company to begin preparations for the Hong Kong IPO, the best outcome investors have said they can expect.

Didi’s largest shareholders, including SoftBank, Tencent Holdings and Uber Technologies, have seen Didi shares fall nearly 90% since going public, when it was valued at about $80 billion. After delisting, the company’s shares are likely to be traded on the so-called “pink sheet” OTC market, where low-cost stocks and other risk-averse companies are found.

Some investors may be forced to sell because their mandates do not allow them to hold unlisted shares. Hedge funds reduced their stake in Didi by 29% during the first quarter to $231.9 million, according to a Bloomberg analysis of the filing. Even those free of mandates like SoftBank may question whether the shares are worth holding given the uncertainty over punishment from Beijing, increased competition from smaller rivals and stagnant growth overseas.

It is not yet clear what actual punishment awaits Didi, who is in talks with China’s cyberspace administration about fines and other sanctions.

Didi’s shareholders, including Fidelity Investments and BlackRock, have so far refrained from commenting on the delisting.