Didi prevents employees from selling shares indefinitely
Didi Chuxing has banned employees from selling shares in the company indefinitely, dealing a blow to staff at the Chinese ridesharing group, which came under intense regulatory scrutiny after its New York IPO.
Monday was set to mark the end of a 180-day period in which current and former staff were not allowed to sell shares, but the ban was extended without a new end date being set, according to people familiar with the matter.
The change marked the latest setback for the group, which has lost 60% of its value, or about $ 38 billion in market capitalization, since its $ 4.4 billion New York IPO in June.
Chinese authorities launched an investigation into Didi’s data security practices days after the company went public and the group announced this month that it will be removing itself from the U.S. listing and pursuing listing. in Hong Kong.
The company’s shares fell about 5.2% in New York on Monday, wiping out nearly $ 1.5 billion from its market cap.
The company is still unable to register users, and China’s cyberspace regulator has ordered app stores to remove 25 of its other apps, including those that register drivers.
Government data has shown that Didi’s number of trips in China has declined since its apps were pulled from online stores, with passenger trips in November dropping 11% from October.
Didi employees said company morale was low and they were waiting for authorities to announce the results of their investigation.
âThere will certainly be a lot of people disappointed with this,â said Li Chengdong, head of Haitun e-commerce think tank.
âIf you’ve been running for three or four years and now there’s no date set for the Hong Kong IPO. . . probably for some employees, they will not want to wait any longer, maybe they will leave, âhe said.
Current and former Didi employees will only be able to sell shares after the company starts trading successfully in Hong Kong, a person familiar with the situation said.
However, a former member of the operations team said he was not bothered by the delay. âI wasn’t planning on selling at these prices anyway,â he said. “It will go up one day.”
Didi did not respond to a request for comment.
Didi’s big investors were still able to start selling their shares on Monday. These include the Vision Fund of SoftBank, Didi’s largest shareholder, which paid $ 11.8 billion for a 20.1% stake in the company in 2019.
The stake is now worth $ 5.4 billion, and Didi’s growing problems have weighed on the Japanese tech group’s share price.
SoftBank did not respond to a request for comment.
Uber, the US ridesharing group and major shareholder of Didi after merging its Chinese operations into the group in 2016, has said it will gradually divest its stake.
Didi’s other investors include Chinese tech groups Tencent and Alibaba, Apple, and dozens of venture capitalists.
Chinese media LatePost first reported the extension of the blocking period for Didi employees.
Additional reporting by Eli Meixler in Hong Kong
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