Uber’s stake in Didi shrank by $2 billion this week amid China’s crackdown on U.S. listings. In less than one month, the ride-hail giant’s one-time $9.4 billion stake in the Chinese ride-hailing giant dropped by half, CNBC reported on Friday (July 23).
Didi debuted on the New York Stock Exchange (NYSE) at $14 but dropped 21 percent to just over $8 per share.
With roughly a 12 percent ownership stake in Didi, Uber is the company’s second-biggest investor after Softbank.
Although Uber is flipping a profit from Didi — which was valued at about $2 billion five years ago — the value is in a freefall. By the end of March 2021, Uber valued the stake at $5.9 billion in its quarterly filing, according to CNBC.
When Uber sold its China operations to Didi in 2016, the U.S. rideshare giant got a 20 percent stake in Didi in addition to $1 billion. Uber has since been dealing with its own concerns.
Since going for a public offering at the end of June, Didi has been under the spotlight in China since filing for a public offering last month. Didi shares dropped 25 percent to $10.50 per share after its $14 a share debut. Further, regulators mandated that Didi’s app be dropped from WeChat, Alipay and app stores.
Chinese regulators are cracking down on the country’s tech firms and sent officials from seven different agencies to move into Didi’s headquarters for an on-site cybersecurity review.
Not only had officials forced the deletion of Didi’s apps but was also advised to disallow new users. Per the Cyberspace Administration of China, Didi collected data illegally from its user base.