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Chinese ride-hailing company Didi Global's shareholders voted overwhelmingly in favor of the company's departure from the NYSE as the company is all set to delist from the US bourse.
Didi Global is a leading provider of mobility solutions such as cab-hailing, ride-sharing, chauffeur, and several other forms of shared mobility. Moreover, the company also offers auto solutions, food delivery, intra-city solutions, and financial services. The company operates in 17 countries, in 4000+ cities, and is supported by several large investors like Softbank, Tencent, and Uber.
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The company had a total of 1,213,509,469 shares outstanding as of 28th April 2022 (the Record Date). Of this, 781,060,684 votes were in favor of delisting while 30,374,766 were against, turning the vote in favor of delisting the stock with a majority of 64%.
In a press release the company said, "as an ordinary resolution, to delist the Company's American Depositary Shares from the New York Stock Exchange (the “Delisting”) as soon as practicable, and that in order to better cooperate with the cybersecurity review and rectification measures, the Company's shares will not be listed on any other stock exchange before the Delisting is completed".
Several factors have contributed to the decision to delist Didi Global. Firstly, the company had a net loss of 49.3 billion yuan ($7.4 billion) in 2021, almost 5x times higher than the figure in 2020, even though its revenues surged by 23%. Secondly, the company is not on good terms with the Beijing government as the company's $4.4 billion IPO on the NYSE was against the government's wishes.
A move that caused all 26 apps of the company to be taken down from app stores in China. Furthermore, the company is engulfed in a series of anti-trust and cybersecurity violations. The company said a delisting was necessary to complete its ongoing cybersecurity review and related rectification measures.
The price swings in the stock of Didi have been exceptionally large as the stock dropped 48% in mid-March only to jump 122% in the next five days. However, after the massive surge, the stock has consistently declined to extinguish all the gains as it dropped 6.5% on the day of the announcement. However, the stock is witnessing renewed interest from investors as the stock has jumped 27% since that day.
Article by Aman Agarwal.
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