01. DiDi Global Inc. (NYSE:DIDIY)
Founded in 2012, DiDi Global Inc. (NYSE:DIDI) is a Beijing, China-based mobility technology platform with a $16.4 billion market capitalization. DiDi Global Inc. provides ride-hailing and other services in the People’s Republic of China, Brazil, Mexico, and internationally. Paulson & Co. dumped its entire stake in DiDi Global Inc. (NYSE:DIDI) during Q2, comprising of 33.148 million shares valued at $82.871 million.
According to Bloomberg, on July 21, after concluding a year-long investigation into the company, China’s cybersecurity authority fined DiDi Global Inc. (NYSE: DIDI) a hefty $1.2 billion, but the method used to determine the sum has generated controversy in the market. Analysts think that before the business can proceed with its Hong Kong IPO plan, it must first use internal resources to pay down the punishment. Investors are cautious about the company’s future because of the stringent regulatory guidelines.
In a more recent development, Apple discreetly resigned from the board six years after making a $1 billion investment in DiDi Global Inc. (NYSE: DIDI). Uber China was acquired by Didi Global in July 2019 for $1 billion, and Apple invested the same sum in the business later that year. Adrian Perica, Apple’s vice president of corporate development, was appointed to the Didi board as a result of that agreement. Bloomberg reports that Perica has resigned from the board and that no other Apple executive appears to have taken Perica’s place. Despite the fact that the information was only recently made public, Perica actually left the board on August 4, 2022.
In its Q1 2022 investor letter, Horos Asset Management mentioned DiDi Global Inc. (NYSE: DIDI) and explained its insights for the company. Here is what the fund said:
“Didi Global (the so-called Chinese Uber) recently announced that on May 23 it will vote at an Extraordinary General Shareholders’ Meeting on whether the company will continue to be listed on the U.S. stock exchange. In addition, it communicated that, although it is considering alternatives, it has no plans to list on other markets before its shares are delisted in the United States. Investor reaction was swift, with the company’s share price tanking by around 20% in a single day.
In the case of Didi Global, the accusation by the Cyberspace Administration of China that its IPO was conducted without completing a state data security audit is having an even greater impact. This has led to significant pressure from the government, cancelling many of the company’s mobile apps and hurting its business. All in all, Didi Global has collapsed by 87% since its IPO just under a year ago. Although some media commented that Didi Global would possibly recover these apps once it was delisted in the United States, it seems that the Chinese government is not very happy with the fines that were agreed between the company and the CAC, which may explain the delay in its potential listing on the Hong Kong Stock Exchange. This is certainly a clear indication of the extent to which China is willing to preserve certain information from the scrutiny of the United States.”
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