Didi started trading at $ 16.65 per share, against an IPO price of $ 14, giving the company a market cap of $ 80.4 billion, but then fell below $ 15. after the first pop. The shares closed at $ 14.14.
Didi raised $ 4.4 billion in an IPO on Tuesday, selling more shares than expected at the high end of its price range. The IPO still marked a decline from initial expectations, after advisers discussed the $ 7 billion raise, a person involved in the discussions said.
Investors rushed to buy shares of the IPO at the price range Didi traded, following a quick roadshow that ended on Monday, people briefed on the process said. Investors based in Asia were expected to buy a large chunk of the offering, the people said.
Singapore’s Temasek, the state-backed investment firm and existing investor in Didi, and Morgan Stanley, who also served as the IPO underwriter, have indicated interest in buying $ 1.25 billion. worth of stock before the tour, according to a prospectus.
The listing has catapulted Didi into the top ranks of Chinese companies trading in the US markets, raising more money through the IPO of any Chinese issuer in the US since Alibaba debuted in 2014.
Investors appeared to dismiss concerns about tensions between the United States and China and Beijing’s crackdown on big tech companies, which has targeted pricing and data practices in carpools and freight delivery.
Didi operates the dominant ridesharing app in China and has recently started expanding into new markets while pumping money into the development of electric vehicles and autonomous driving systems.
Unlike Uber in the United States, Didi does not generate substantial revenue from delivery services, although its core business has been profitable since 2019 on an adjusted earnings before interest, taxes, depreciation and amortization basis. Investors previously valued Didi at $ 65 billion in a private 2018 fundraiser.
Didi’s IPO followed the listings of several Chinese companies in the United States, including commercial freight company Full Truck Alliance and online grocery company Dingdong. Shares of Full Truck Alliance have fallen since the company went public last week, giving it a market cap of less than $ 20 billion.
The listing will pave the way for significant payouts to Didi investors. including SoftBank’s Vision Fund, Uber, and Chinese tech group Tencent.
SoftBank’s first Vision fund, which counts Didi as its largest investment, is reportedly holding a stake worth around $ 16 billion at the company’s opening price. Uber’s stake, acquired through a 2016 deal in which the US company left its China operations, is said to be around $ 9.6 billion.
Goldman Sachs, Morgan Stanley and JPMorgan were the main underwriters of the Didi offer.
Additional reports from Tabby Kinder in Hong Kong
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