what should i do with my didi stock

Why you should be wary of buying Didi global stock?

This likely led to index funds tracking the index, as well as funds benchmarked to the index, buying into Moderna stock. Moreover, the high visibility and surging stock price have meant that Moderna stock has emerged as a favorite among retail traders. This could make the stock volatile in the near term if momentum traders pull back.

How to buy Didi IPO stock and whether you should?

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Should I Sell Didi?

Didi Is Risky Until the Dust Settles on Its Regulatory Woes

• Regulatory Troubles. The warning signs were pretty clear for Didi even before it went public. ...
• Negative Outlook Ahead for DIDI Stock. The future of Didi is murky at this point. The CAC has put restrictions on an additional 25 apps that the company operates.
• The Bottom Line on DIDI Stock. DIDI stock has had a tough time due to its legal headwinds. ...

When will Didi start trading?

DiDi Global Inc – ADR (NYSE:DIDI) shares are trading lower following a Bloomberg report suggesting China's Ministry Of Transportation is drafting measures to ensure rights of ridesharing and trucking platform drivers. DiDi Global shares are also trading ...

IN THE SPOTLIGHT

What Happens When a Stock Delists? 10 Things to Know About the Didi Delisting.

What Happens When a Stock Delists

Delistings are common and can be voluntary (as is the case with Didi) or involuntary. Most often, a stock delists from an exchange when it ceases operations due to a bankruptcy filing or takeover. Often times, stocks are delisted from an exchange when they no longer meet the listing requirements.

NYSE: DIDI

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China's ride-hailing leader is headed back home

DiDi Global ( DIDI -5.40% ), the largest ride-hailing company in China, plans to delist its shares from the New York Stock Exchange and pursue a new listing in Hong Kong. The announcement, which comes less than six months after DiDi's initial public offering (IPO), shouldn't surprise investors.

1. Going private at a discount to its IPO price

Over the past few years, many Chinese companies that initially went public in the U.S. took themselves private before going public again on Chinese exchanges at much higher valuations. The deals couldn't be blocked because the management controlled most of the votes, and U.S. investors were often forced to sell their shares at steep discounts.

2. Retreating to an OTC exchange

A less painful option would be for DiDi to relist its shares on an over-the-counter ( OTC) exchange. That's what Luckin Coffee ( LKNC.Y 0.00% ) did after it was delisted from the Nasdaq last June. Luckin's stock had dropped below $2 per share at the time after its fabricated sales figures were exposed, but it now trades at about $13.

3. Swapping ADR shares for HK shares

In its press release, DiDi claims its ADR shares "will be convertible into freely tradable shares" in Hong Kong after it relists the stock.

Should investors still hold their shares of DiDi?

DiDi's investors might be reluctant to sell their shares at their current reduced prices, since the stock now trades at less than its estimated revenue this year. However, the stock should remain cheap for a very long time.

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China wants Didi to delist over security concerns

China is concerned about the security of its citizens’ data. Not only is Didi listed in the U.S., but two of its biggest stockholders, Uber and SoftBank, are non-Chinese companies.

It's unclear what would happen to your Didi stock

Bloomberg first reported that China wants Didi to either list on Hong Kong, which is now fully part of China, or go private. If the company lists in Hong Kong, U.S. Didi investors would get its Hong Kong-listed shares. However, the Hong Kong listing may be at a lower price than its current U.S. price.

SoftBank could lose billions from the Didi fiasco

SoftBank, which is Didi's largest stockholder, would be the biggest loser in a delisting. So would Uber, which got a stake in Didi in exchange for selling its Chinese operations to the company. Uber has been facing tough competition outside the U.S. and has exited several other markets in Asia.

Other Chinese stocks might also fall

Chinese stocks tumbled amid the tech crackdown. Furthermore, just when fears of further Chinese crackdowns were abating, concerns of a slowdown in the world’s second-largest economy grew, exacerbated by Alibaba's tepid outlook during its Q2 2022 earnings release.

Xi Jinping might not care much

For Chinese president Xi Jinping, social stability and national security are a far bigger concern than Didi stockholders losing billions of dollars. The country has taken a hard turn toward the left, erasing the gains it has made over the last two decades. Didi’s delisting would also impact other Chinese companies seeking a U.S. listing.

NYSE: DIDI

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China's top ride-hailing platform still faces daunting challenges

DiDi Global ( DIDI 6.08% ), China's largest ride hailing company, went public five months ago at $14 per share. Today, it trades at less than $8. Its decline was caused by an abrupt government crackdown shortly after its public debut.

How fast was DiDi growing?

In 2020, DiDi generated 94% of its revenue from its Chinese mobility services segment, which provides its ride-hailing and ride-sharing services.

NYSE: DIDI

At the time of its IPO, DiDi's growth rates looked promising. Its revenue rose 14% in 2019, fell 8% in 2020 as the pandemic spread, but surged 106% year-over-year in the first quarter of 2021 as those headwinds waned.

How did the Chinese government cripple DiDi?

In early July, the Cyberspace Administration of China (CAC) suspended all new user registrations for DiDi's app in China as part of a vague "cybersecurity review". The CAC then ordered the removal of DiDi's 25 apps from all of China's mobile app stores.

DiDi's platform isn't dead yet

DiDi is probably still making plenty of money. The platform's 377 million annual active users and 13 million annual active drivers in China (as of this March) can still access its platform if they've already downloaded the app.

DiDi's stock looks cheap -- but it could get a lot cheaper

DiDi's stock looks cheap, but it's trading nearly 50% below its IPO price for obvious reasons. It could briefly rally if it relaunches its apps in China, but that euphoria will quickly fade as investors focus on its market share losses, rising expenses, new restrictions, and a potential delisting instead.

Political pressure on both sides

Amid rising tensions between the U.S. and China, former U.S. President Donald Trump took steps toward removing U.S. investment in Chinese companies, especially those deemed to have alleged ties to the Chinese military.

Delisting is not the end

Chinese stocks have been delisted from U.S. exchanges for reasons other than politics.

Scenario 1 – Share Buy Back

A share buyback means that the company will buy its shares back from you (and all other investors) at an agreed price.

Scenario 2 – Share Transfer

A share transfer is easy to understand. Company X that’s listed in America, China and Singapore can “transfer” your shares to China or Singapore if Company X were to delist in America.

Scenario 3 – Limbo

In simple terms, you will continue to own the shares in the company but you cannot trade them publicly. This means that if you have 10 shares at $10/share, nothing has changed you will still have that same qty in your brokerage account.

What should shareholders do?

In the case of any delisting, it is unlikely that your investment will completely disappear. There will be warning signs and there will be ample time for you to sell your shares even if you have to do so at a significant loss.