Should you buy Didi stock?
© Provided by Benzinga DiDi Global Inc (NYSE: DIDI) shares are trading lower Monday after the company announced a shareholders meeting to vote …
Is Didi global stock a buy?
Mar 25, 2022 · Lately, one of the more violent movers in the market has been DiDi (NYSE:DIDI). Today, shares of DIDI stock are down in a big way, dropping 13% at the time of writing. This move comes on heavier ...
When is Didi delisting?
Jul 23, 2021 · Shares of DiDi Global ( DIDI -13.95% ), a China-based ride-sharing company, fell again today on worries that the Chinese government could significantly penalize the company for its recent U.S. IPO....
How did Didi get in trouble with data regulators?
2 days ago · Why is Didi going to delist? Chinese regulators opposed the U.S. listing, saying it could expose Didi’s vast troves of data to foreign powers. The firm pressed ahead with the June 2021 IPO anyway,...
Investors are rightly concerned about potential penalties from the Chinese government
What happened
Chris has covered Tech and Telecom companies for The Motley Fool since 2012. Follow him on Twitter for the latest tech stock coverage. Follow @tmfnewsie
So what
Shares of DiDi Global ( NYSE:DIDI), a China-based ride-sharing company, fell again today on worries that the Chinese government could significantly penalize the company for its recent U.S. IPO.
Now what
Bloomberg News reported yesterday that the Chinese government was considering "unprecedented" penalties against DiDi. Those penalties may include anything from a fine to suspension of its operations, or even delisting.
What is Didi's net loss?
Investors are right to be concerned about DiDi's stock right now. The Chinese government has a lot of authority over companies based in the country, and the company's business is certainly being affected by the government's decisions right now.
How much is Didi worth?
While Didi had a net loss of $1.6 billion on revenue of $21.6 billion last year, according to its filings with the U.S. Securities and Exchange Commission, its diversity cushioned it against the worst of the pandemic downturn. The company reported net income of $837 million in the first quarter of 2021. With growth in its core market beginning to slow, it has expanded rapidly into fields from car repairs to grocery delivery and has pumped hundreds of millions into researching autonomous driving technology. It’s also said to be planning to expand services into Western Europe.
What is the critical question about Didi?
by a company based in China, after Alibaba Group Holding Ltd, giving Didi a market value of about $68 billion. Accounting for stock options and restricted stock units, the company’s diluted value exceeds $71 billion -- well below estimates of up to $100 billion as recently as ...
Does Didi have the most travel information?
On Didi specifically the critical question is what the review regarding user data finds. But analysts are already looking at the likely wider impact. Key issues are whether the action is likely to discourage other Chinese tech firms from embarking on an overseas listing, and whether the action marks a new direction for the regulatory crackdown. Didi itself said in a statement in would fully cooperate with the review. It warned though that the removal of the app for new users may have an adverse affect on revenue.
Is China cracking down on big tech?
The Global Times, a Communist Party-backed newspaper, wrote in an editorial that Didi undoubtedly has the most detailed travel information on individuals among large internet firms and appears to have the ability to conduct “big data analysis” of individual behaviors and habits. To protect personal data as well as national security, China must be even stricter in its oversight of Didi’s data security, given that it’s listed in the U.S. and its two largest shareholders are foreign companies, it added.
Is Uber still operating in China?
More broadly, Beijing is in the process of a sweeping crackdown on the nation’s Big Tech firms designed to curb their growing influence. In November 2020 the authorities derailed the planned IPO of fintech giant Ant Group Co. and in April hit Alibaba with a record $2.8 billion fine after an antitrust probe found it had abused its market dominance.
Why Chinese stocks are falling
The ruling doesn’t stop the company from operating -– its half-billion or so existing users will still be able to order rides for now. But it adds to the uncertainty surrounding all Chinese internet companies as regulators increasingly assert control over Big Tech.
China tech crackdown
Last week, China announced a five-year plan that called for greater control of the economy. Over the last five decades, China has gradually opened up its economy, which has helped Chinese consumers and companies.
Have Chinese stocks become uninvestable?
Meanwhile, under Xi Jinping’s leadership, China has been clamping down on several sectors of the economy. Companies like Alibaba, which have helped increase China’s reputation abroad, have been targeted in a severe crackdown.
-637613334653185056.png)
What’s Didi?
- It’s China’s biggest ride-hailing company. Didi squeezed Uber out of China five years ago, buying out the American company’s operations after an expensive price war. Its blockbuster IPO on June 30 was the second-biggest in the U.S. by a company based in China, after Alibaba Group Holding Ltd, giving Didi a market value of about $68 billion. Accounting for stock options and restricted s…
What Is This Investigation About?
- Two days after the IPO, the Cyberspace Administration of China said it was starting a cybersecurity review of the company to prevent data security risks, safeguard national security and protect the public interest. People familiar with the matter say the regulators had asked Didi as early as three months before to delay the IPO because of security concerns, but Didi went ah…
Are There Any Hints?
- The Global Times, a Communist Party-backed newspaper, wrote in an editorial that Didi undoubtedly has the most detailed travel information on individuals among large internet firms and appears to have the ability to conduct “big data analysis” of individual behaviors and habits. To protect personal data as well as national security, China must be even stricter in its oversigh…
Is It Just Didi?
- No. The Chinese internet regulator has widened its probe to two more U.S.-listed companies, targeting Full Truck Alliance Co. and Kanzhun Ltd.soon after launching the review into Didi.
Was This Out of The Blue?
- No. In May, China’s antitrust regulator ordered Didi and nine other leaders in on-demand transport to overhaul practices from arbitrary price hikes to unfair treatment of drivers. More broadly, Beijing is in the process of a sweeping crackdown on the nation’s Big Tech firms designed to curb their growing influence. In November 2020 the authorities derailed the planned IPO of fintech gia…
Why Does Didi Matter?
- You can’t really overstate just how dominant Didi is in ride hailing in China, accounting for 88% of total trips in the fourth quarter of 2020. When Didi bought Uber’s Chinese operations in 2016, Uber took a stake in the company that currently stands at 12%. Didi’s U.S. IPO was shepherded by a who’s who of Wall Street banks. Its largest shareholder is Japan’s SoftBank Group Corp. with mo…
How’s The Company Doing?
- While Didi had a net loss of $1.6 billion on revenue of $21.6 billion last year, according to its filings with the U.S. Securities and Exchange Commission, its diversity cushioned it against the worst of the pandemic downturn. The company reported net income of $837 million in the first quarter of 2021. With growth in its core market beginning to slow, it has expanded rapidly into fields from c…
What Happens Now?
- On Didi specifically the critical question is what the review regarding user data finds. But analysts are already looking at the likely wider impact. Key issues are whether the action is likely to discourage other Chinese tech firms from embarking on an overseas listing, and whether the action marks a new direction for the regulatory crackdown. Didi itself said in a statement in woul…
The Reference Shelf
- QuickTakes on China’s crackdown on tech giants, and why it changed the ruleson Ant.
- Bloomberg Opinion’s Shuli Ren explains how Didi’s foreign investors are on the hook, and how China is like the tiger who came to tea.
- Businessweek examineshow China crushed Jack Ma and who’s next.
- A preview of the clouds that marredDidi’s IPO ambition.