What's going on?
Didi announced on Friday that it’s delisting its shares from the US stock market, but the Chinese ride-hailing company already has its next destination in mind.
What does this mean?
The writing’s been on the wall for Didi almost since its initial public offering (IPO) in June – one of the biggest-ever US listings of a Chinese company. Only a few days afterwards, Chinese regulators – worried that the company might leak sensitive data – scrubbed Didi from the country’s app stores and banned it from onboarding new users. The company lost more than 30% of its average daily users in just two months, and its stock fell over 40%.
But regulators weren’t finished, telling Didi in late November to delist its shares from the US stock market altogether. Now, the downtrodden company has finally admitted defeat: it announced it would remove its stock from the New York Stock Exchange and list in Hong Kong instead.
Why should I care?
The bigger picture: Hong Kong is in for a good 2022.
Didi’s plan will be music to Hong Kong’s ears: the country’s stock exchange has been falling out of favor recently, with data out on Friday showing that it’s raised 20% less from IPOs this year than last. That might all change in 2022: Goldman Sachs has said that over half its Chinese clients who wanted to list in the US are now eyeing up Hong Kong, as they scramble to circumvent China’s tight restrictions on foreign listings.
Zooming out: SoftBank’s bad choices.
The 14% jump in Didi’s share price after the announcement was a much-needed win for SoftBank. The Japanese conglomerate – which owns around 20% of the company – had a tough week: its $40 billion sale of British chip designer Arm to Nvidia was just blocked by regulators, and Grab – the Singaporean ride-hailing firm in which SoftBank has a 19% stake – saw its share price fall 20% after it hit the US stock market.