The shareholders of Didi, the application that dominates the market for ordering taxis in China, will be asked to validate the exit of the company from the Wall Street Stock Exchange during a vote organized on May 23, the group announced , Saturday, April 16. The company, sometimes referred to as “Chinese Uber”, is under investigation over the security of user data. This had been launched by the Chinese regulator as a punishment after the company had raised 4.4 billion dollars (3.71 billion euros) on the New York Stock Exchange, in the summer of 2021, on the based on a valuation of $67 billion.
The investigation, along with a suspension of Didi from Chinese app stores preventing it from recruiting new customers, has cost the company dearly: it announced a 12.7% drop in sales on Saturday. business for the fourth quarter of 2021, with a net loss of $27 million. Additionally, its stock has seen its value drop from $14 when it was listed on June 30, 2021, to $2.46 today.
The case has sent a chill through China’s entire digital sector, which has already been subjected to a series of investigations and new regulations.
But the case has also cast a chill over 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 tech companies, more than a serious data breach issue. Today, the company is a shadow of its former self: basically, the government has pressed the pause button on their development” explains Tu Le, founder of the consulting firm Sino Auto Insights, in Beijing.
Between two fires
The Chinese Uber had announced its plan to leave Wall Street in December 2021, specifying at the time that it was working alongside an IPO on the Hong Kong Stock Exchange to organize a transfer of shares. But negotiations with the latter broke down in March, according to an article by the Bloomberg agency. Which caused Didi’s share price to fall. 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, the financial subsidiary of Alibaba, the sanctions against Didi raise the question of whether Beijing is not likely to ban any listing of Chinese companies in the foreign, for reasons of data security and economic nationalism. The country’s groups are now caught between two fires: the American stock market regulator threatens to exclude them because of a conflict with its Chinese counterparts, while the latter prohibit their companies from submitting to audits conducted by foreign entities. In March, after a tumble on the Chinese technology stock market, the Beijing authorities tried to reassure: they now claim to be working on an agreement with the American regulator on this subject.