Didi pushes back on IPO rumors

Famous Beijing-based giant Didi denied any allegations of plans to go private in a bid to satisfy the Chinese government amidst latest regulations concerning users’ data security.  

After the Wall Street Journal released a report discussing the possibility of Didi going private, the ride-hailing app’s shares increased by approximately 50 percent in Thursday’s pre-market trade. 

The company has been targeted by Beijing regulators ever since it made its U.S. market debut about a month ago, followed by several U.S. senators asking its financial markets regulator to launch an investigation concerning the company’s Chinese share listings. 

In a statement that came as a reaction to the report, Didi debunked any allegations of going private as it currently switching it focus to cybersecurity. 

“The rumors about the privatization of Didi are untrue, and the company is currently actively cooperating with cybersecurity reviews,” Didi said on Chinese social media platform Weibo.  

Two days after the Beijing-based firm began trading shares on New York Stock Exchange (NYSE), the Beijing cyberspace supervisory authority ordered Chinese online stores to remove Didi from their app stores under the pretense that it is illegally collecting users’ personal data. 

The Chinese authorities’ move influenced the firm’s market value, leading to a sharp drop by around a third ever since Didi raised its initial public offering (IPO) to $4.4 billion a month ago. 

Since Didi’s released its IPO on NYSE at the end of June, the Chinese driver service broker’s shares fell drastically in value.  

On Thursday, Didi shares finished its U.S. trading day with a rise of 11.3 percent.  

Didi, alongside many Chinese Big Tech companies such as Alibaba and ByteDance have been under the Chinese government’s scrutiny regarding their behavior of monopolizing the market to their benefit.  

This led to some of the firms’ largest share prices slump in the U.S., Hong Kong, and mainland China’s trading market as China puts the industry under tough scrutiny. 

In parallel, Didi follows a comparable business model to its American competitor Ube. The Chinese app had already conquered Uber in a vicious price war in its home market.