As the Chinese ride-hailing behemoth rode a wave of initial public offerings ahead of the July Fourth holiday, Didi Global Inc.’s shares struggled to hang on to initial gains in their U.S. public market debut Wednesday. Didi DIDI, +3.75 percent began at $16.65 on Wednesday morning after announcing an offering price of $14 per share, and early purchases saw it rise as high as $18 per share. However, the stock rapidly retreated from those gains, dipping below $15 before 2 p.m. Eastern time, and most recently trading between $14.50 and $15.
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, +33.04 percent, and cybersecurity company SentinelOne Inc. S, +22.17 percent.
See: The IPO market in the United States is bracing for 17 deals this week, at least two of which are worth more than $1 billion. In Wednesday’s session, the company’s market capitalization reached about $80 billion, putting it behind U.S. rival Uber Technologies Inc. UBER, -1.72 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,” stated David Trainer, CEO of financial research firm New Constructs, in a note.
+0.47 percent for LYFT.
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
