China’s DiDi is worth US$68 billion after its Wall Street debut

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 China’s DiDi is worth US$68 billion after its Wall Street debut
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Summary

  • The stock opened at US$16.65 against the offering price of US$14.
  • The company was expecting a valuation of US$100 billion after the IPO.
  • The IPO saw considerable success despite the ongoing US-China trade dispute and Washington's concerns over Chinese companies' poor financial auditing standards.

China's ride-hailing company DiDi Global Inc. (NYSE: DIDI) stocks gained 1% after their first day of trading on the New York Exchange (NYSE) Wednesday, taking its market cap to US$68.49 billion.

The stock had seen a high of more than 17% in intraday after the IPO, one of the biggest by a Chinese company in the US since the Alibaba Group's (BABA) initial public offer in 2014.

The company was expecting a valuation of US$100 billion after the IPO. The stock opened at US$16.65 against the offering price of US$14. The stock fell in the late afternoon after seeing early gains. The stock closed at US$14.14 at the end of its first-day trading session.

The SoftBank-backed company priced its 316.8 million American depositary shares at the upper end of US$13-US$14 per share, raising US$4.4 billion. DiDi is the latest Chinese company to enter the US market after about 29 others debuted this year, raising around US$7.6 billion, Refinitiv data show.

The IPO saw considerable success despite the ongoing US-China trade dispute and Washington's concerns over Chinese companies' poor financial auditing standards. The Beijing-based company is also under a probe by Chinese agencies over its possible antitrust breaches, Reuters reported.

DiDi is also backed by tech giants like Uber, Tencent, and Alibaba. It was founded in 2012 by CEO Cheng Wei as Didi Dache before changing its name several times and finally settling for Didi Chuxing.

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Also Read: DiDi Global NYSE IPO: Here’s all you need to know

SoftBank is the largest investor of DiDi with a 20.2% stake, followed by Uber 12% and Tencent 6.4%. Cheng owns a 6.5% stake, with a voting power of 35.5% due to a dual-class stock structure.

Based on the first-day closing price, his stake in the company is now worth US$4.45 billion, while Uber's stake is worth US$8 billion, according to Reuters.

In the first quarter of 2021, DiDi, which operates in 16 countries, with more than 490 million annual active users, had reported a profit of around US$30 million. Goldman Sachs and JP Morgan were among the lead underwriters for the IPO.

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