Why DiDi (DIDI) Stock Crashed 20% Today

Shares of DiDi Global (NASDAQ: DIDI) are down more than 20% today after the Chinese ride-sharing company announced it has scheduled an extraordinary general meeting (EGM) on May 23 to vote on the delisting of its American Depositary Shares from the New York Stock Exchange (NYSE).

The Chinese ride-hailing company said it will not list its shares on another stock exchange until it completes delisting in the U.S. In the meantime, DiDi said it will explore different strategies including considering other stock exchanges for potential new listing plans in the future.

China's authorities said on Saturday that DiDi itself made a decision to delist from the NYSE. According to the China Securities Regulatory Commission (CSRC), DiDi’s decision to delist is not associated with other U.S.-listed Chinese stocks or negotiations with the United States to resolve an audit issue.

The company announced its plan to delist its U.S. shares in December, saying it wants to list in Hong Kong after coming into conflict with Chinese regulators by completing its $4.4 billion U.S. IPO in 2021.

Regulators in China ordered Didi to suspend its listing until a cybersecurity investigation of its data practices was completed.

Several days after the IPO, the Chinese cyberspace regulator has instructed app stores to remove 25 mobile apps managed by DiDi and ordered the ride-hailing giant to halt the registration of new users.

Following DiDi’s shareholder meeting announcement, a Chinese securities watchdog issued a statement saying that DiDi’s decision was not related to the other U.S.-listed Chinese companies.

DiDi also reported results today with Q4 revenue coming in at 40.78 billion yuan, compared to 46.70 billion recorded a year ago. Net loss was reported at 383 million yuan, down 95% YoY. Adjusted EBITDA came in at negative 3.91 billion yuan, resulting in a loss per share of 32 RMB cents vs 66.66 yuan YoY.

Earnings per American depositary receipts was reported at 8.0 RMB cents vs. loss/shr 16.66 yuan YoY.

DiDi stock price is down over 20% today.

By Senad Karaahmetovic

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