The Didi Chuxing group’s presence on Wall Street lasted just five months: pressured by Chinese authorities and amid the rivalry between Beijing and Washington, the technology and private transport services company will no longer be listed on the New York Stock Exchange.
This is a blow to the group’s shareholders, with a presence in many countries, including Brazil: in five months on the New York Stock Exchange, the bonds lost 45% of their value, from US$ 14 (R$ 78) to US$ 7 .80 (BRL 43) in the last session.
In June, Didi starred in the second largest entry of a Chinese company on Wall Street, by raising US$4.4 billion (R$24.7 billion), behind only the US$25 billion (R$140.8 billion) obtained by the e-commerce giant Alibaba in 2014.
But the debut on the stock exchange was quickly overshadowed by a Chinese government cybersecurity investigation, which encourages the country’s big tech companies to quote in their markets like Hong Kong, Shanghai, Shenzhen or now Beijing.
After several months of government pressure, the coup de grace appears to have come from the United States. The agency that regulates the activities of the Exchange has adopted a rule to be able to withdraw foreign companies that do not have an authorized audit, which includes all Chinese groups on Wall Street.
A few hours later, the company Didi Chuxing announced its delisting from the American stock exchange.
“After careful consideration, [a Didi] will start the delisting process from the New York Stock Exchange as of today and will begin preparations for listing in Hong Kong,” the company said in a statement.
With 15 million drivers and nearly 500 million users, Didi dominates the private urban transport application market in China.
“Hard lesson”
This is not a surprising decision after the “hard lesson” of Chinese regulators to the Didi group, said Angela Zhang, an expert in Chinese law at the University of Hong Kong.
“Now all Chinese technology companies will take data security issues seriously,” he added.
Beijing launched a regulatory offensive a year ago against internet giants such as Alibaba, Tencent or Didi to fight alleged monopoly practices and their growing influence in consumers’ lives.
A few days after entering Wall Street, Chinese authorities launched an investigation against Didi into his use of private data.
They also banned downloading of the app in China, an unusual move that did not affect customers who already had the app on their phones. Agents appeared at the company’s offices in an investigation related to fears about “national security”.
Also under pressure in the United States, where regulators apply increasingly stringent vigilance and restrictions, several Chinese companies have in recent months sought a second quote in China, such as search engine Baidu or Alibaba.
However, even at home businesses are free from inconveniences. A year ago, Beijing blocked Alibaba’s electronic payments subsidiary, Ant Group, from listing on the Shanghai and Hong Kong Stock Exchange.
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