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Didi Shares Slide to Another Record Low as Post-IPO Lockup Ends



Didi Global Inc.’s shares fell to another record low Monday after a “lockup” period expired following its June initial public offering, even as the Chinese ride-hailing company sought to prevent employees from selling their stock.

The end of Didi’s 180-day lockup period, which was based on the June 29 date of its listing prospectus, freed up shares held by the firm’s early backers such as SoftBank Group Corp., Uber Technologies Inc. as well as international investors such as hedge funds, mutual funds and private-equity firms that collectively pumped billions of dollars into Didi before its IPO. Many of these shareholders have been sitting on large, unrealized losses for months.

Didi shares, which had already plumbed new lows last week, fell $0.30 or 5.4% Monday to $5.30, giving the embattled firm a market capitalization of $25.6 billion, according to FactSet.

The Beijing-headquartered company went public on the New York Stock Exchange after selling shares at $14 apiece and raising $4.4 billion in the biggest U.S. IPO by a Chinese company since Alibaba Group Holding Ltd.’s 2014 blockbuster listing. Didi’s market capitalization briefly neared $80 billion following its trading debut, and plunged after Chinese regulators launched a probe into the company’s cybersecurity and forced some of its popular apps to be taken down.


Earlier this month, Didi said it plans to delist from the U.S. and pursue a listing in Hong Kong, without specifying how it would do it. That has created uncertainty for investors, causing its shares to slide further.

Didi is in talks to list in Hong Kong “by introduction,” according to a person familiar with the matter, meaning the company would go public on the city’s stock exchange without raising fresh funds or issuing new shares.

Didi has restricted its employees from selling shares in the company, according to people familiar with the matter. The selling ban, which doesn’t have a stated end date, also applies to shares and stock options owned by former employees who left after Didi went public, they added. The company intends to lift the restriction after its shares are listed in Hong Kong, one of the people said. The selling ban was earlier reported by LatePost, a Chinese media outlet specializing in technology and internet companies.

Lockup agreements—which are common in IPOs—prevent early investors and company employees from selling their shares in the first months after a firm goes public. The restriction helps prevent a flood of shares from hitting the market shortly after a company’s listing, which could cause heavy selling pressure. Typically, the end of the lockup period gives early investors the opportunity to cash in on their stakes.

Many of Didi’s pre-IPO investors bought stakes when the company’s private valuation was more than $50 billion, and have seen their stakes in the ride-hailing firm fall in value during the lockup period, regulatory filings show.


With Didi’s shares now more than 60% below their IPO price, those investors have to decide whether it is worth waiting for the ride-hailing firm to go public in Hong Kong and improve its business performance over the long run, or realize the losses on their investments.

SoftBank held a 20.1% stake in Didi at the time of the ride-hailing firm’s IPO. The shares cost the Japanese investor approximately $12 billion initially, according to a recent SoftBank quarterly report. That initial investment had shrunk by roughly 58% to $5.1 billion, based on Didi’s closing price on Monday. A SoftBank spokesman declined to comment.

Uber had a 11.9% stake in Didi when it listed. The San Francisco-headquartered ride-hailing company acquired the stake after merging its former Chinese business with Didi several years ago. During the three months ended on Sept. 30, Uber recognized an unrealized loss of $3.2 billion from its Didi investment, according to Uber’s latest quarterly report. The shares have since fallen further in value.


A spokesman for Uber said the company doesn’t plan to sell its Didi shares immediately. The company has sufficient liquidity that gives it the flexibility to maintain all its positions, including Didi’s, Uber’s Chief Financial Officer Nelson Chai said in the company’s third-quarter earnings call in early November. “We are not a fund manager, and we will monetize the stakes we view as purely financial at the appropriate time, while continuing to hold more strategic stakes for the long run,” Mr. Chai added.

Write to Dave Sebastian at

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Appeared in the December 28, 2021, print edition as ‘Didi Shares Slide to Record Low.’

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