Didi investors find themselves caught between a rock and a hard place ahead of vote to delist the firm from New York

Didi investors are expected to see further losses once the firm’s shares move from the New York Stock Exchange to the over-the-counter market, analysts said

The shareholder vote on delisting would enable Didi to complete its rectification process, part of the Chinese government-ordered cybersecurity review

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The stakes are high for Didi Global shareholders because the Chinese ride-hailing giant has no plan B for its delisting initiative. Photo: Shutterstock

Published: 10:30pm, 20 May 2022Updated: 9:12am, 21 May 2022

Shareholders of ride-hailing giant Didi Global face long odds to avoid losses, according to analysts, given the choice of voting later this month to delist the company from the New York Stock Exchange (NYSE) or seeing the firm be put under further scrutiny by Chinese regulators.

The shareholder vote on delisting, which is scheduled on May 23, would enable Didi to complete its rectification process, part of the Chinese government-ordered cybersecurity review, “to resume normal operations”, according to a filing last week by company chairman and chief executive Will Cheng Wei to the US Securities and Exchange Commission.

While that move marks a rare case in China’s corporate history, Beijing-based Didi Chuxing, which went public in New York last year under the name Didi Global, said the delisting will help restore its 26 apps in various Chinese app stores and enable the company to restart new user registrations in its home market.

Didi investors are expected to see further losses once the company’s shares move from the NYSE to the over-the-counter (OTC) market, analysts said.

A trader works the floor of the New York Stock Exchange during the initial public offering of ride-hailing company Didi Global on June 30, 2021. Photo: Reuters

“Didi share liquidity will be much lower on the OTC market,” said Luo Zhiyu, a partner at DeHeng Law Offices in Beijing and a specialist in cross-border initial public offerings, mergers and acquisitions.