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Didi Chuxing may delist, class action lawsuit in the works

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Didi Chuxing, a Chinese ride-sharing company that gained global attention after being listed on the U.S. stock market last month, may delist in order to avoid pressure from Chinese authorities and compensate investors.

didi chuxing

In a report on the 29th (local time), The Wall Street Journal (WSJ) quoted officials as saying that Didi Chuxing is negotiating with banks, regulators, and investors to resolve issues that have arisen since it listed on the U.S. stock exchange.

According to an official, the company has the option of doing a public purchase of market-traded shares at the corporate level and converting it to a private company.

On the 30th of last month, Didi Chuxing, the Chinese version of Uber, went public in New York and raised $4.4 billion.

China’s National Internet Information Office (CAC) has launched an investigation into Didi Chuxing’s domestic data security. By the end of the 28th, the company’s stock price had fallen to $8.87 as the Chinese government pulled the app from the App Store. Shares of Didi Chuxing had reached $18 since its listing on the stock market.

In the United States, shareholders who suffered losses have filed a class action lawsuit through major law firms. Investors alleged Didi Chuxing provided false information before the listing, and Goldman Sachs, the listing organizer, also joined the suit.

The Wall Street Journal reported that Didi Chuxing was considering delisting starting in the middle of the month. The same day, the company denied the WSJ’s report on Weibo, a social media site in China, and said it was cooperating with the investigation.

In after-hours trading, Didi Chuxing’s stock price jumped nearly 40 percent due to the WSJ report, but then declined to about 11 percent following the company’s denial.

For MetaNews.

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Jonathan Hobbs is an Australian investor and author that trades on a variety of asset classes, including currencies, equities, and commodities. Jonathan’s experience as a macro trader leverages his unique writing style to combine important elements, such as technical analysis and news. The other elements that he brings into his unique writing styles are foundation analysis aimed at rational equilibrium values, evaluating the sizes and motivations of buyers and sellers, as well as identifying the needs of the buyers and sellers in the individual markets. Jonathan is committed to quality writing for new traders as well as veterans.

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