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.
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)