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Investing.com – ADRs of Didi Global (NYSE:DIDI) slumped more than 10% in Friday’s premarket, after being up more than 13% earlier as traders come to grips with the delisting being planned by the company.
Coming just after five months of its listing, market players expect the company’s offer to be a sweet one since anything otherwise could create legal obstacles for the ride-hailing firm. The company listed on NYSE on June 30 and the issue price was $14. The stock has mostly traded below that price. It closed at $7.80 Thursday.
While the company told the SEC Thursday that the ADRs will be convertible into freely tradable shares on another internationally recognized stock exchange, Reuters said listing in Hong Kong might prove complicated.
According to the news agency, Didi aims to complete a dual primary listing in Hong Kong in three months, too tight a deadline for a company with a history of compliance problems. Only 20%-30% of Didi’s core ride-hailing business in China is fully compliant with regulations, Reuters said.
The company is also under pressure from Beijing to complete delisting by June, Reuters said.
Didi ignored the advice of the authorities in China to delay its public debut, pending scrutiny of its data handling practices. Miffed with the company’s decision, the regulators asked it to stop onboarding new users while also mandating online stores to take its apps off their platforms.
