More than a dozen executives, workers, and Didi investors tell how strict government requirements brought down an $80 billion company.
Didi shareholders overwhelmingly accepted the company's delisting plan after Beijing regulators stated they wouldn't loosen a cap on adding new users unless they quit NYSE.
Ride-Hailing Champion was Gone After Forcing Uber out of China, Here's How
On a cold December in 2021, Cheng Wei invited his closest friends and acquaintances to his Beijing office. Didi Global Inc.'s founder told his lieutenants to slash spending by a fifth in 2022 and start recruiting after Lunar New Year.
The reclusive millionaire, known only as Will, who seemed much more depressed than usual that day, said they had a rough year. However, the following year will be more challenging.
The sad gathering represented what many already understood. Once praised for pushing Uber out of China, the ride-hailing champion was gone. It was replaced by a defeated shell worth a fifth of what it had been at its peak, losing customers, unable to secure money for critical programs, and whose management feared offending Beijing.
Didi's fight against Chinese authorities since its start in New York is a prime example of the perils of doing business in China. Interviews with more than a dozen executives, employees, and Didi investors reveal how an $80 billion corporation was brought to its knees by extreme government rules.
Didi had the worst loss of shareholder value ever seen within the first 12 months of an Asian IPO that raised over $1 billion, losing approximately 80% of its market worth, or more than $60 billion, in a single year.
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Didi Crisis Includes Rival Government Groups
The Didi drama is a fascinating tale of conflicting government factions, billionaires' blunders, and the IT industry's failure to judge Xi Jinping's quickly changing environment. Investors and executives have battled for decades to understand the world's No. 2 economy.
Regardless, the company was active with the regulator in 2021. According to Bloomberg News, one of the subjects was a plan to delist from New York and relist in Hong Kong simultaneously. That would bring them closer to home, minimize its impact on prominent backers, and ease CAC data security issues.
The Didi incident is indicative of a drive to limit internet pioneers like Alibaba, Tencent, and Meituan, whose services infiltrated Chinese culture. Anyone doing business or engaging with China has learned that rules are opaque, and no one can judge Beijing's intentions.
Despite the Indecision of China's Restart, Didi Left NYSE on June 10
On May 23, after the ride-hailing firm said that Beijing officials had made it clear that they would not ease a limit on adding new customers unless Didi first left the NYSE, shareholders of Didi overwhelmingly supported the company's delisting proposal.
It is still unknown when Beijing would let Didi sign up new users and upload its apps to widely used app shops.
The authorities will compel Didi to pay a fine first, according to a person involved with negotiations in Beijing. However, they are unsure of the size of the historically high charge. While this was happening, a Didi product manager announced that the company's applications would be relaunching 'soon.'
Along with Didi, Kanzhun, and Full Truck Alliance, two other Chinese businesses that went public in New York simultaneously as Didi, were also kicked off app stores and prohibited from accepting new clients last summer.
The business has not informed stockholders of the date it will leave the NYSE. Nikkei Asia was told by two people who had been briefed on Didi's intentions that the company would only operate until June 10.
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