Uber looking to sell Didi, other non-strategic stakes, CEO says
- Uber chief executive said its Didi stake is not strategic, as they are a competitor and the China market was ‘a pretty difficult environment with very little transparency’
- Uber’s operational business last quarter for the first time achieved profitability, but its Didi stake drove a US$2.4 billion net loss in the third quarter
The CEO of Uber Technologies Inc said on Tuesday the company was looking sell stakes in what it considers non-strategic investments in other companies, including its shares in Chinese ride hailing company Didi Global Inc.
Speaking at a virtual fireside chat with a UBS analyst, Chief Executive Dara Khosrowshahi said many of the companies in which Uber has a stake have recently gone public and are still subject to a lock-up period.
While Khosrowshahi said Uber would continue to hold some stakes for strategic reasons, it was looking to sell many of them, including in Didi.
“Our Didi stake we don’t believe is strategic. They’re a competitor, China is a pretty difficult environment with very little transparency,” the Uber CEO said.
Khosrowshahi said the company was in no rush to sell the shares. “Those kinds of stakes we look to monetise smartly over time,” he said.
Didi fines for unlicensed cars, drivers cast a shadow over Hong Kong listing
Uber shares rose 4.3 per cent to close at US$37.26 after Khosrowshahi’s remarks on Tuesday. He also said Uber last week had its best week ever in terms of companywide gross bookings at its ride-hail and food delivery operations.
But overall, ride-hail trips remained around 10 per cent below pre-pandemic levels, the CEO said.
Uber had roughly US$13.1 billion tied up in investments in other companies as of the end of the third quarter, including US$4.1 billion in Didi.
Some investors have grown concerned that Uber holding on to these investments sends a signal to the market that stakes in other companies are more attractive than putting freed-up capital into Uber’s own operations.
Uber’s operational business last quarter for the first time achieved profitability, but its Didi stake drove a US$2.4 billion net loss in the third quarter.
Shares of Didi, which has been rattled by a probe by Chinese regulators into its data practices, are down around 53 per cent from their June 30 IPO price.
Under pressure from Chinese regulators, Didi earlier this month said it would withdraw from the US stock exchange and pursue a Hong Kong listing.
Didi and Uber, both backed by Japanese conglomerate Softbank Group Corp, in 2016 struck a deal under which Uber exited the Chinese market and sold its China business to Didi in exchange for equity.
Uber also holds stakes in Indian food delivery company Zomato, Southeast Asian rival Grab, self-driving company Aurora Innovation Inc and others. Grab and Aurora are also backed by Softbank.
