Uber wants to sell its stake in competitor Didi, says CEO

Uber is looking to sell stakes in non-strategic assets, including its stake in Beijing-based Didi Global, its chief executive said on Tuesday, who also described the Chinese market as difficult and lacking in transparency.

The US company exited China in 2016 after losing more than $1 billion a year to a price war with Didi. Uber ended up selling its operations in the country to Didi in exchange for a stake, holding 12.8% of the Chinese company, according to a Didi document in July.

“We don’t believe our stake in Didi is strategic. They are a competitor, China is a very difficult environment with very little transparency,” Uber Chief Executive Dara Khosrowshahi said in a virtual chat with an analyst at Uber UBS.

Khosrowshahi said the company is in no hurry to sell the shares. He said that many of the companies in which Uber has a stake have recently gone public and are still subject to a ‘lockup’ period — in which investors in a company at the time of listing cannot sell shares — adding that Uber will continue to hold some participations for strategic reasons.

Didi did not immediately respond to a request for comment on Wednesday.

Uber shares rose 4.3% to close at $37.26 after Khosrowshahi said Tuesday. The platform had about $13.1 billion in investments in other companies at the end of the third quarter, including $4.1 billion in Didi.

Some investors were concerned that Uber would keep these investments, sending a signal to the market that holdings in other companies are more attractive than allocating capital to its own operations.

Uber’s operating businesses last quarter achieved profitability for the first time on an adjusted earnings basis, but its stake in Didi generated a net loss of $2.4 billion for the period.

Didi’s shares, which were shaken by an investigation by Chinese regulators into its data practices, are down about 53 percent from the June 30 initial public offering price.