Didi Compensates $740 Million in Settlement for Controversies Surrounding U.S. Initial Public Offering
Didi Global Inc., often referred to as the global ride-hailing giant, has been navigating a turbulent period since its debut in New York in 2021. The company recently agreed to pay $740 million to settle a shareholder lawsuit, which was related to the handling of its turbulent global entry into the public market.
The lawsuit in question focused on whether Didi Global Inc. had prior knowledge of the regulatory scrutiny and potential risks that would follow. Chinese regulatory authorities reportedly warned Didi about national security concerns during its 2021 IPO preparations, but the company did not officially disclose such warnings, likely due to internal handling of the issue or strategic decisions amid regulatory scrutiny.
Didi's shares, which initially traded at $14, now trade over-the-counter in New York and remain significantly below their global entry price. The company's turbulent 2021 IPO, followed by regulatory challenges, led to its delisting from the mainboard. However, Didi Global Inc. aims to list on the Hong Kong stock exchange, though the timeline remains uncertain.
Despite the challenges, Didi Global Inc.'s revenue grew 11% to 56.4 billion yuan in the June quarter, driven by an increase in transactions on its platform. The company reported a loss of 2.5 billion yuan ($351 million) for the same period, compared to a profit of 854 million yuan a year earlier.
One positive development for Didi Global Inc. has been the growth in average daily transactions in China. The company reported a new high of 37.1 million daily transactions in the June quarter. However, the company's app was suspended by Chinese regulators due to data security concerns, which has added to the challenges Didi Global Inc. faces.
Since its delisting, the company has focused on reviving growth in a difficult economy. Didi Global Inc.'s resilience and determination to bounce back from these challenges will be closely watched by investors and the tech industry as a whole.
