A lot of tech companies went public in 2021, and many if not most of them are trading below their IPO prices. That’s OK—markets rise and fall, and with any luck, the shares will recover eventually. But if you’re a shareholder in one such company, Chinese ride-hailing firm Didi Global, you may be out of luck. Didi revealed today that it plans to hold a shareholder vote on May 23 to approve its delisting from the New York Stock Exchange. It has no plans to relist anywhere else right now. It’s also not buying any of the U.S. shares back. If this proposal is approved, American shareholders in Didi will be trapped inside a private company.
Didi shares, which sold for $14 each last June in the offering, are today fetching just $2. That performance makes Uber and Lyft look like stock market stars. To be sure, the proposal isn’t a slam dunk. Didi’s two co-founders, Cheng Wei and Jean Liu, won’t vote using the supervoting shares they hold, which give them control. Instead, all shareholders will have an equal vote. That gives SoftBank and Uber, which between them own 33% of Didi, a significant voice in what happens. Maybe they could bargain for some kind of buyout deal for foreign investors in exchange for their yes votes. But don’t count on it.
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