The company is going public as investors continue to embrace share sales by tech companies. But Didi could face additional scrutiny because of its Chinese origins.
Didi, the leading Chinese ride-hailing platform, made its Wall Street debut on Wednesday, capping a year in which ride-hailing and travel companies have struggled to overcome intermittent pandemic lockdowns. Didi began trading at $16.82 a share on the New York Stock Exchange, up 20 percent from a $14-a-share offering price. But investor interest cooled throughout the day, and Didi closed at $14.20, pegging the company’s value at more than $69 billion. The company made its debut, trading under the ticker DIDI, as Wall Street continues to embrace fast-growing tech companies regardless of their ability to turn a profit. Ride-hailing companies like Uber and Lyft, in particular, have proved to be profligate money losers, often burning through billions in cash each year. Didi is no exception. It lost $1.6 billion last year, though it reported a profit of $30 million in the first quarter of this year. Revenues declined 8 percent to $21.63 billion last year because of the pandemic, the company said in a regulatory filing. Despite its dominance in China and other countries, Didi could face unusual scrutiny from investors because of continued tensions between the United States and China. The American government has placed some Chinese tech companies on lists that restrict their ability to do business with the United States or its trade partners. “Didi, for good and bad, is in the center of the U.S.-China cold tech war,” said Daniel Ives, managing director of equity research at Wedbush Securities. “It’s a successful I.P.O. coming out of the gates,” he said, but it still has a lot to prove to investors worried about tension between the countries. Investors could also be wary of regulators in Didi’s home country. China’s antitrust authorities have begun to aggressively scrutinize the country’s big internet companies.
