Chinese ride-hailing service, DiDi Global Inc (NYSE: DIDI) made on Wednesday its market debut on the New York Stock Exchange (NYSE) platform. As common with newly listed stocks, the company’s shares met with a high level of volatility, surging as much as 28.6% before ending the first trading session down by 13.73% to $14.14. The shares started trading at $16.65 per share, up about 19% from the company’s offering price of $14 per share. The shares are seeing some bullish moves in the After Hours session, as investors appear to rally to secure enough stakes in the fresh hot stock.
Coinspeaker reported earlier that Didi raised up to $4.4 billion in its Initial Public Offering (IPO) from the sales of 317 million American Depository Shares (ADS), up from the initially planned 288 million shares. The company attained a valuation of $80 billion at the high end of the daily spike with the current closing price giving a $67.8 billion market capitalization. These figures position Didi as one of the largest Chinese firms to make a public debut in the US, a feat Alibaba Group Holding Ltd (NYSE: BABA) recorded after hitting $25 billion in its 2014 IPO.
Didi Market Debut to Fuel International Expansion
While maintaining a dominant presence in China, Didi, following the market debut is seeking to continue propelling itself on the path of international expansion it has outlined.
Besides China, Didi has a presence in about 14 countries, including Brazil and Mexico and the new liquidity raise will be used to power growth into new markets to compete globally.
The Firm’s Prospectus in Retrospect
According to a CNBC report, the firm, per its issued prospectus noted it hit a 107% profitability in the first quarter of 2021 against the previous year’s figures. The company’s new growth resurgence came as economic reopening is underway in most regions, a move boosted by the COVID-19 vaccination programs.
Didi said it has 493 million annual active riders, and 41 million average daily transactions. The growth which has notably been consistent since the firm was established in 2012 was unable to wade off the loss of revenue by about 10% as China battled with the outbreak of the pandemic. The company’s caution note as issued in the prospectus was modeled in the ongoing antitrust probe in which authorities are investigating whether the firm squeezed out smaller competitors.
The company did not shy away from the likely aftermath of this probe and it informed its prospective investors well in advance.
“We cannot assure you that the regulatory authorities will be satisfied with our self-inspection results or that we will not be subject to any penalty with respect to any violations of anti-monopoly, anti-unfair competition, pricing, advertisement, privacy protection, food safety, product quality, tax, and other related laws and regulations. We expect that these areas will receive greater and continued attention and scrutiny from regulators and the general public going forward,” the company said in its prospectus.
Didi is backed by Uber Technologies Inc (NYSE: UBER) who owns a 12.8% stake after selling its Chinese entity to the firm amidst stiff pricing competition. Other early backers include SoftBank’s Vision Fund which holds a 21.5% stake and Apple Inc (NASDAQ: AAPL) which also invested $1 billion in Didi in 2016.