Didi Stocks Rise 9% After Tencent Increases Shares

The US Securities and Exchange Commission released a document on Thursday suggesting that Chinese tech giant Tencent has added about 1.8 million Class A ordinary shares to its existing holdings in ride-hailing firm Didi Global Inc. This brings Tencent‘s shareholding ratio to 7.4% as of December 31, 2021, up from the 6.4% that had been disclosed ahead of its June initial public offering. The news boosted Didi shares by 8.8% during Thursday trading.

Didi was in urgent need of such a confidence boost. Since its IPO last year, the firm’s stock has been decimated by regulatory crackdowns in China. Its market value plunged $47 billion in less than eight months after domestic regulators raised concerns about its data security. Didi delisted from the US stock exchange in December last year, seeking to go public in Hong Kong instead.

At the end of December last year, Didi released its Q2 and Q3 financial reports. Calculated by US GAAP, Q2 and Q3 revenue totalled 48.2 billion yuan ($7.58 billion) and 42.675 billion yuan ($6.71 billion), respectively, while net losses attributable to ordinary shareholders were 24.4 billion yuan ($3.84 billion) and 30.6 billion yuan ($4.81), respectively.

In addition, Daniel Zhang, Didi chairman and CEO, resigned from the board of directors and was replaced by Zhang Yi, the firm’s senior legal director.

The recent move contrasts sharply with changes to Tencent‘s stakes in other companies announced in recent months. In early January, Tencent reduced its holdings in Singapore-based tech company Sea Ltd., prompting speculation that it was planning to reduce its stake in other Chinese tech firms. That came less than a month after Tencent told investors it planned to divest more of its stake in JD.com by handing out more than 460 million shares as a one-time dividend. Tencent‘s holdings dropped from 17% to 2.3% as a result.

Source: Pandaily

You might also like