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Didi Soars On Report It May Go Private To Appease Regulators In China

Stock MarketsJul 29, 2021 05:53AM ET
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© Reuters.

By Dhirendra Tripathi

Investing.com – Didi Global ADR (NYSE:DIDI) soared by 34% in Thursday’s premarket trading after The Wall Street Journal reported that the company’s biggest backers could take it private in order to placate Chinese regulators, only weeks after angering them with an IPO in New York that they had advised against.

The regulators had responded to the listing by asking app stores like Alipay and WeChat to take the company off their platforms until a review of the company’s security framework was completed. That sent Didi's ADRs plummeting.

The ride-hailing giant had listed on the NYSE on June 30 and after briefly trading above the issue price of $14 slipped below it. It hit a low of $7.16 earlier this week before recovering somewhat.

A WSJ report said earlier this month that the regulator’s abrupt move was prompted by the company’s refusal to delay its initial public offering until a review of its data policies had been completed. 

The report comes only hours after details emerged of a call between the Chinese Securities Regulatory Commission and a handful of major domestic and foreign banks and investment companies, including Goldman Sachs (NYSE:GS), JPMorgan (NYSE:JPM) and Blackrock (NYSE:BLK). Various reports suggested that the CSRC had tried to calm investors' fears about the safety of their investments, after a recent onslaught against the Educational Technology sector triggered panic selling across the broader market. 

The premarket move in Didi's ADRs implies that its backers would be willing to compensate U.S. investors who bought into the IPO more or less in full. The IPO had been priced at $14 per ADR.

 

Didi Soars On Report It May Go Private To Appease Regulators In China
 

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Comments (2)
Koichi Ikeda
Koichi Ikeda Jul 29, 2021 6:40AM ET
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You dont believe The Wall Street Journal if you are a pro.
Anakin Skwk
Anakin_Skwk Jul 29, 2021 6:33AM ET
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Didi just denied the report.
 
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