Didi stock becomes an option on China tech

ByJosephine J. Romero

May 31, 2022 , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

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A driver of Chinese journey-hailing services Didi drives with a cellphone showing a navigation map on Didi’s app, in Beijing, China July 5, 2021. REUTERS/Tingshu Wang – RC24EO9UW3RM

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HONG KONG, May perhaps 24 (Reuters Breakingviews) – Brave investors may possibly salvage price from Didi Global’s wreckage. Shareholders voted to delist China’s ride-hailing firm from the New York Inventory Trade, capping a disastrous 11-thirty day period journey that wiped 90% off Didi’s valuation considering that its original public giving.

Didi’s destiny now lies with China’s cybersecurity regulator, which is investigating the corporation more than information techniques. Application suppliers have taken down Didi’s expert services while existing choices are banned from registering new buyers. The company stressed that if it stayed in New York, it would not be able to complete the cybersecurity assessment.

The optimistic state of affairs is that regulators will enable Didi to resume operations and relist in Hong Kong. At the current $7 billion marketplace capitalisation, Didi is buying and selling at considerably less than 50 % its guide value.

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The challenges are substantial, although. Didi faces probably harming penalties. It may possibly not distinct Hong Kong’s rough listing needs, which were just one reason the company opted for New York in the initial location. New regulations also raise fresh new issues about Didi’s advancement. This white-knuckled investment decision trip is not for every person. (By Robyn Mak)

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(The creator is a Reuters Breakingviews columnist. The viewpoints expressed are their own.)

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