DiDi Global Inc refuted a story in The Wall Street Journal on Friday that the ride-hailing service was considering buying back its publicly listed shares in the United States after its June market debut was hampered by Chinese government directives to improve data security.
According to the Journal, one option being examined by DiDi and its bankers to settle investor objections is buying back the shares, citing unnamed sources.
DiDi’s stock has dropped around 25% since its initial public offering on June 30, after the business was barred from adding new users while it changed how it handled personal data and authorities announced an investigation of the firm’s overall network security.
DiDi stated on its website, “The company certifies that the aforementioned information is not genuine.” In the firm’s cybersecurity evaluation, the company is fully working with the appropriate Chinese government agencies.The three-sentence statement didn’t say anything about the security review, when regular operations would return, or what alternatives were being examined in response to investor complaints.
DiDi, based in Beijing, raised around USD 4.4 billion in its first public offering. DiDi Global’s IPO was the largest stock offering by a Chinese business since Alibaba Group Holding Ltd’s IPO in 2014. It’s one of a slew of Chinese firms that have seen their anti-monopoly, data security, and other rules tightened.
Tencent Holding Ltd., a gaming and social media operator, as well as e-commerce platforms Alibaba Group and JD.com Inc, have all seen their stock values decrease in New York and Hong Kong. The Chinese internet authority found “severe breaches” in DiDi’s collection and storage of personal data.
It stated that the business will “rectify issues,” but provided no further specifics. Later, DiDi was forced to take down 25 of its applications from app shops. Chinese officials said earlier this month that they will increase oversight of firms whose stock is sold on international stock markets. This will involve monitoring of cross-border data transfers as well as the handling of private information, according to the statement.
China’s internet regulator started an investigation into DiDi Global days after the firm went public and urged it to cease registering new customers, citing national security and the public interest. The regulator also stated that DiDi’s mobile apps will be removed from app stores.
According to the WSJ article, DiDi Global has been in negotiations with bankers, regulators, and major investors to attempt to fix the issues that have arisen since its NASDAQ offering. DiDi has asked its main underwriters to analyse investors’ opinions on a privatisation proposal, as well as the pricing range that they would accept, according to the article.
According to the article, one of the preliminary alternatives being explored is a take-private deal that would include a tender offer for the company’s publicly listed shares.