Chinese company DiDi Global announced that it intends to delist from the New York Stock Exchange due to pressures from Beijing. Yahoo Finance's Brian Sozzi, Brian Cheung, and Julie Hyman discuss the market reaction.
BRIAN CHEUNG: Some waves made last night as Chinese ride hailing app DiDi said it planned on bailing from the New York Stock Exchange after a $4.4 billion IPO just in June of this year. The company said it was looking to list its shares on the Hong Kong Stock Exchange without citing a reason. But, of course, Julie, this is all coming especially amid concerns that, you know, the Chinese and the US equity markets could become delinked as a lot of these Chinese companies start to maybe look domestically to do capital raises instead of in the US.
And this actually comes as the SEC made some changes regarding the accounting rules by which foreign companies have to play by when they do get listed here in the US. So I don't know if it's too much to say if this DiDi news should be kind of extrapolated to what other Chinese companies have done or might be doing, but certainly a notable headline last night.
JULIE HYMAN: Yeah, I mean, and there are a lot of different stories and themes involved in this. There is, indeed, that sort of decoupling that you're talking about. There is also the China exclusive regulatory crackdown on its own home-based companies in which DiDi was swept up in because ride-hailing companies, and app companies more broadly, were part of that.
And then there's this sort of DiDi specific situation with the Chinese government as well because when it initially was reported that it was planning to list here in the United States, it became clear that sort of not all of the constituents were necessarily informed, including those within the Chinese government. And DiDi went ahead and did that listing anyway. And that listing, by the way, was at $14 a share. The shares, initially upon news of this delisting, actually rose in late trading in the United States. But now, as you can see, they are trading lower going into the US Open.
So what's gonna happen now? Well, as you said, it looks like DiDi is gonna pursue this listing in Hong Kong instead. According to some sources I'm seeing this morning, we actually could see a delisting in the US happen after a Hong Kong listing so that it would be sort of an easier transition. And it sounds like, as well, according to people familiar with the situation, that DiDi plans to file for that listing early next year, perhaps in March, which would mean, then, a listing in Hong Kong in the summer.
You know, we'll see at this point if they can do better in Hong Kong than they did in the US in terms of that trading. Is this the peak of regulatory scrutiny on the company? It does feel like that the Chinese authorities have sort of pulled back from their most active regulatory scrutiny of the tech industries generally.
BRIAN SOZZI: Yeah, and it's not just a DiDi thing here. I mean, this is a broader, I think, industry problem with these Chinese companies. And look, premarket action, you're seeing Alibaba shares under a good deal of pressure, JD.com down about 6% here. And year to date, guys, speaking of Alibaba, down about 3% now, this stock is down almost 50% year to date according to Yahoo Finance Plus data.
I can't tell you how different of a story Alibaba has been this year compared to, really, the three to four years prior. At one point, I remember someone to the Detroit for an Alibaba event where they were trying to make inroads into the US market. Things have really shifted here with that story.
BRIAN CHEUNG: Yeah, and certainly, premarket right now, DiDi moving down by 6%. But as you point out, Brian, there could be a lot of movement in a lot of these other Chinese-listed US stocks as well-- or, rather, US-listed Chinese stocks as well. So certainly worth watching as we watch for that market open in about 12 minutes or so. Of course, there could be also that noise from the jobs--