Shareholders of Didi, the app that dominates China’s taxi ordering market, will be asked to validate the company’s listing on the Wall Street Stock Exchange during a vote organized on May 23, the group announced on Tuesday. Saturday April 16. The company, sometimes referred to as “Chinese Uber,” is under investigation over user data security. This had been launched by the Chinese regulator as punishment after the company raised 4.4 billion dollars (3.71 billion euros) on the New York Stock Exchange in the summer of 2021, based on a valuation of 67 billion. of dollars.
The investigation, coupled with a suspension of Didi from Chinese app stores that prevented it from landing new customers, has cost the company dearly: on Saturday it announced a 12.7% drop in business sales for the fourth quarter. of 2021, with a net loss of $27 million. Additionally, its shares have seen their value drop from $14 when trading on June 30, 2021 to $2.46 today.
The case has sent chills through China’s digital sector, which has already been the subject of a series of investigations and new regulations.
But the case has also shaken the entire Chinese digital sector, already subject to a series of investigations and new regulations since the end of 2020. « There is no clarity in this story: I think it is a punishment, an example for other technology companies, rather than a serious data breach problem. Today, the company is a shadow of its former self: the government has basically hit the pause button on its development.” explains Tu Le, founder of consultancy Sino Auto Insights, in Beijing.
between two fires
Chinese Uber had announced its plan to exit Wall Street in December 2021, specifying at the time that it was working alongside an initial public offering on the Hong Kong Stock Exchange to arrange a share transfer. But negotiations with the latter broke down in March, according to an article by the Bloomberg agency. Which caused Didi’s stock price to drop. In its press release on Saturday, the company specifies that it is no longer seeking to enter Hong Kong.
Seven months after the cancellation of the IPO of Ant Group, Alibaba’s financial arm, the sanctions against Didi raise the question of whether Beijing is likely to ban the listing of any Chinese company abroad, for security reasons. data and economic nationalism. The country’s groups are now caught between two fires: the US securities regulator is threatening to exclude them due to a conflict with their Chinese counterparts, while the latter prohibit their companies from undergoing audits carried out by foreign entities. In March, after the collapse of the Chinese technology stock market, the Beijing authorities tried to reassure: now they claim to be working on an agreement with the US regulator on this issue.