DiDi Shareholders To Vote On US Delisting: What Does That Mean For Other US-Listed Chinese Stocks?

DiDi Global Inc DIDI is preparing to delist from the New York Stock Exchange (NYSE), according to a Reuters report.

What Happened: The company announced that it will hold an extraordinary general meeting (EGM) on May 23 to vote on its delisting plans.

DiDi said that it is going to cooperate with an ongoing cybersecurity probe and hence it will not apply to list its shares on any other stock exchange before the delisting of its American Depositary Shares from the NYSE is complete.

China’s cyberspace watchdog ordered app stores to remove 25 mobile apps operated by DiDi. It has also asked the company to stop registering new users.

Also Read: Is Didi's IPO A Stock Loser From The Start?

In December 2021, DiDi announced that it would delist from the NYSE and pursue a listing in Hong Kong after it ran foul of Chinese regulators by pushing ahead with its $4.4 billion U.S. IPO.

The ride-hailing company said on Saturday that its fourth-quarter revenue fell 12.7% from the same period a year earlier. 

DiDi's total revenue for the quarter ended Dec. 31, 2021, fell to 40.8 billion yuan ($6.40 billion) from 46.7 billion yuan ($7.3 billion) a year earlier.

Why It Matters: In response to DiDi’s delisting announcement, China’s securities regulator has said that its decision to withdraw from the U.S. market was an independent one made by the company that has nothing to do with other U.S.-listed Chinese stocks.

The regulator also added DiDi’s decision isn’t related to ongoing discussions between the two countries about auditing requirements.

DiDi shares were down 3.15% on Friday, closing at $2.46, according to Benzinga Pro.

Also Read: Don't Dump Didi But Don't Buy It Either

Photo: Courtesy of didiglobal.com