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Buying in Red, Softbank increases its stakes in China’s Uber – DiDi

Defying the market sentiments toward China’s tech giant, Softbank vision fund invests $4bn. 

Recently, China extended its tech crackdown on DiDi, leading to a massive decline in the company’s proposition. Post its listing on NYSE recently, the stock experienced a significant decline.

DiDi global

Softbank’s 20.1% stake in DiDi, purchased at ~$12Bn is now worth ~$7Bn, cutting the market valuation by almost half. Softbank Vision Fund has a heavy investment in China’s tech sector and with increasing scrutiny from the regulators, future prospects look bleak (post-Didi’s crackdown, SoftBank’s Full Truck Alliance experience a similar crackdown). The fund is expected to build on Didi’s vision of expanding beyond the current heavy investment in the China region.

Though many pundits say that DiDi could experience a bounce-back post-investigation, there are thin chances of this ending anytime soon.

What do you think about the prospects of investments in China?

Thanks for Reading!

Shubham Agarwal (CFA L2 Candidate | Incoming MBA candidate at University of Cambridge, UK)

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