More details are coming together in the lead-up to DiDi Global's (NYSE:
DIDI) IPO on the New York Stock Exchange. The stock
tumbled 20% yesterday to $12.49/share - just three sessions after the company went public - after China began a probe into the firm's data practices and barred new users from its app. DIDI is
down another 4% in premarket trade this morning, leading many to question how much was known before the ride-hailing giant raised $4.4B at a $67B valuation?
The underwriters: Wall Street banks including Goldman Sachs, Morgan Stanley and J.P. Morgan made about 2% on the total amount raised, or around $88M when spread out between them. Language about the risks of doing business in China starts on page 7 of the IPO prospectus, while regulatory and anti-monopoly warnings appear on page 11. While some say the disclaimers are enough, others expect a certain amount of deep expertise or specifics about the regulatory environment.
The company: DiDi "forced its way" to go public in New York without completing a thorough data security assessment by the Cyberspace Administration of China, the
South China Morning Post reports. That prompted Beijing to suspend it from app stores and put it under a national security review. While the data assessment is not yet an institutionalized part of the listing process, and Didi said it had no foreknowledge about the security review, the company announced it will cooperate with Chinese authorities.
The investors: Should they have done more homework? Ahead of the IPO, several
reports suggested China was ramping up pressure on its Internet companies, including DiDi, and was
pushing more antitrust scrutiny of its homegrown tech firms. Back in April, Beijing also
imposed sweeping restrictions on the fast-growing financial divisions of companies like DiDi, as well as stricter compliance on listing abroad, curbs on information monopolies and the gathering of personal data. (
11 comments)
EmoticonEmoticon