NEW YORK (CBSNewYork) – Didi Global’s shares rose about 19% in their New York Stock Exchange debut on Wednesday, valuing the ride-hailing behemoth at US$80 billion, making it the largest Chinese firm to list in the US since 2014. Didi’s stock began at US$16.65, up from the initial public offering price of US$14 per share, which was supported by SoftBank. It raised US$4.4 billion by pricing an upsized offering of 316.8 million American Depositary Shares at the upper end of its US$13 to US$14 range.
Didi’s IPO in New York will be the largest stock offering by a Chinese firm in the United States since Alibaba raised $25 billion in 2014.
Full Truck Alliance, dubbed “Uber for trucks,” raised US$1.6 billion in its initial public offering in the United States so far this year.
Didi was started in 2012 by Cheng Wei as Didi Dache, a taxi-hailing app, and is backed by technology investment titans Alibaba, Tencent, and Uber. It amalgamated with Kuaidi Dache to form Didi Kuaidi, which was renamed Didi Chuxing later. According to Forbes, Cheng, who was born in 1983 in a small village in Jiangxi’s southern province and had worked as an assistant to the CEO of a foot massage company, was worth US$1.2 billion before Didi’s stock market debut.
Cheng’s stake in Didi is valued US$5.22 billion at the first public offering price. When he couldn’t find a taxi on a cold winter night in Beijing, he conceived the idea for a ride-hailing platform. Didi’s largest investor, SoftBank, will own a 20.2 percent share in the company after the IPO. Tencent will keep 6.4 percent of Didi, while Uber will keep 12%. Cheng will control 6.5 percent of the business he founded. Didi, the world’s largest mobility-technology platform, went on to buy rival Uber’s China division in 2016, and Uber retained a stake in Didi at the time. As part of a bigger unit rebranding, the corporation plans to invest $1 billion in its vehicle services sector in 2018. It has also made significant investments to develop its main business outside of its home market, either by investing in local partners or by establishing services.
Didi holds a commanding position in China’s online ride-hailing market, with 4,000 outlets in 16 countries. According to a recent regulatory filing, it has over 490 million annual active users. Private car-hailing, bike-sharing, delivery, freight and logistics, and financial services are among its services. Didi’s IPO also makes it the latest Chinese company to get into US finance markets despite US-China tensions. Despite the political squabbles, Refinitiv data shows that 29 Chinese companies raised $7.6 billion in US IPOs in the first half of the year. Morgan Stanley Investment Management had expressed interest in subscribing up to US$750 million in Didi’s IPO, while Temasek had expressed interest in subscribing up to US$500 million. The principal underwriters were Goldman Sachs (Asia) LLC, Morgan Stanley, and JPMorgan./nRead More