Didi Global Inc.’s stock soared nearly 20% on its first day on the New York Stock Exchange, but it ended the day just 1% higher than its initial public offering price amid a flurry of pre-July Fourth IPOs. Didi DIDI, +1.00 percent began trading at $16.65 per share on Wednesday morning after announcing an offering price of $14 per share. It rose as high as $18 per share in early trading, but subsequently fell. The stock closed at $14.14 in regular trading.
Didi raised $4.4 billion by selling 316.8 million shares, above its target of 288 million American depositary shares. It was the biggest IPO on a day when at least ten firms went public, including legal-tech business LegalZoom.com Inc. LZ, +35.18 percent, and cybersecurity company SentinelOne Inc. S, +21.43 percent.
According to Dealogic, eleven deals have already priced this week, excluding special-purpose acquisition firms, or SPACs, for a total raising of $7.73 billion. See: The IPO market in the United States is expecting 17 deals this week, with at least two of them worth more than $1 billion. The company’s market capitalization peaked at about $80 billion on Wednesday, but dipped to around $68 billion at the close, putting it behind US rival Uber Technologies Inc. UBER, -1.26 percent, which has a market capitalization of roughly $95 billion. Didi, which was started in China in 2012 and purchased Uber’s Chinese company in 2016, has grown to service 377 million yearly active users in China alone, as well as operating in 15 other countries. Aside from ride-hailing, the corporation also has delivery and freight companies, among other things. For further information, go to: Didi: 5 Things to Know Before She Goes Public Didi cited enormous chances in its native nation in its IPO filing, adding, “China’s huge and urbanizing population creates opportunities for new mobility services.” Manhattan Venture Research analyst Santosh Rao agrees. In a message to investors, he said, “Didi is in a commanding position in one of the largest mobility marketplaces valued $873 billion, with 4.1 percent shared mobility penetration.” He also mentioned a $3.9 trillion market in that country by 2040, and claimed Didi is “well positioned to achieve considerable traction” in other regions including as Latin America and Europe, the Middle East and Africa, and Asia. “Despite dominating about 90% of the ride-sharing industry in China, Didi’s business model is just as unprofitable as Uber and Lyft LYFT, +0.82 percent,” noted David Trainer, CEO of financial research firm New Constructs, in a note.
Investors have seen Uber and Lyft demonstrate that ride-sharing is not a profitable business.” Didi made a profit in the first quarter, with a net profit of 5.49 billion rembini ($837 million) on revenue of RMB 42.16 billion ($6.44 billion), owing to investment gains. For the past three years, Didi has announced yearly losses of RMB 10.6 billion, RMB 9.7 billion, and RMB 15 billion. Didi files for an IPO with a feature that none of its US competitors have: profit Meanwhile, highlighting Didi’s dominance of the Chinese ride-hailing business, Atlantic Equities analyst Xiao Ai launched coverage with an overweight rating and a stock price objective of $25. The company’s dominance was included in its IPO filing as a risk issue. Didi is one of the tech firms under investigation by the Chinese authorities for antitrust violations. Didi is not in the ride-hailing industry in the United States, but it does have a research and development facility in Silicon Valley that is mostly focused on autonomous vehicles, according to a company representative./n
