Is there a Didi stock price? Not right now. However, there is a rumor of a Didi IPO coming. Rideshare companies have been on the rise for quite some time. Uber and Lyft have fairly done well on the market. Which is tempting to other companies looking to go public. How would it hurt Uber or Lyft? Or is there room on the market for more rideshare stocks?
There was talk of a Didi IPO making its way to the US stock exchanges. However, you won’t be seeing a Didi stock price any time soon. This is a Chinese rideshare company. And they decided to IPO on the Hong Kong Stock Exchange instead of the US Stock Exchange. As a result, you can’t trade Didi stock right now. Will that change in the future? That remains to be seen. In the meantime, you can trade Uber and Lyft if you want in on the rideshare investments.
China’s leading ride-hailing firm Didi Chuxing is planning to enter Europe according to several reports published recently. The company is trying to reach lucrative markets like Europe before its highly anticipated initial public offering (IPO). It’s reportedly planning to introduce its ride-sharing service in Germany, France, and the U.K.
Didi has already nominated a team that’ll manage its European operations. Moreover, they’ve commenced local hiring to support future operations in the region. With plans to start additional services. Such as food delivery, depending on the demand.
Shares of established rivals in the ride-sharing industry declined following the news of a Didi stock price. Uber stock plummeted for two straight days, diving more than 8%. While Germany’s Delivery Hero SE fell nearly 4%.
Didi is already the number 1 ride-sharing service in China. Now, it’s stepping into new territories to fuel its growth momentum and take on Uber. Goldman Sachs expects the ride-hailing market to grow eight-fold to $285 billion by 2030. The latest expansion reports suggest that Didi wants to fully capitalize on the booming market.
Didi ousted Uber from China in 2016 by acquiring its Chinese unit. In return, it offered a stake of 17.7 percent to Uber to end a costly battle with the San Francisco-based company; besides gaining a complete hold of China’s ride-sharing market.
Didi currently operates in 13 countries outside China. However, entering and operating in Europe won’t be easy for the company. It’s expected to face several regulatory challenges there. For instance, Britain’s highest court recently announced a verdict, saying Uber drivers are eligible for worker’s benefits like paid leave and minimum wage. Didi could face similar challenges while moving forward with its plan to enter European countries. Such obstructions could hurt its operating margins.
Is there a Didi IPO yet? Beijing-based Didi plans to go public this year, hoping to achieve a valuation anywhere between $60 billion to $80 billion. It was previously looking to list its shares on the New York Stock Exchange (NYSE). Though uncertain relations and increasing trade tensions between the U.S. and China forced the company to choose Hong Kong over NYSE.
However, at some point in the future, the company could consider a listing on NYSE mainly due to more capital-raising opportunities. Aas well as the presence of peers such as Uber and Lyft. Didi is currently in discussions with investment banks including JPMorgan and Goldman Sachs for its IPO. As a result, we could see a Didi stock price.
The company has raised billions of Chinese yuan since its inception in 2012. It’s backed by some notable companies. For example, e-commerce giant Alibaba, tech giant Tencent Holdings, and Japanese conglomerate Softbank Group.
Separately, Didi last month raised $300 million for its self-driving unit, on top of more than $500 million it raised last summer. The company started developing and testing autonomous vehicles in 2016. It has an open-road testing license for Beijing, Shanghai, and California.
Didi’s history dates back to 2012 when Cheng Wei, a former sales manager at Alibaba, started an online service, allowing people to book taxis through their smartphones. The company, backed by Tencent, was primarily competing in the market against Alibaba-backed Kuaidi Dache.
Both Didi and Kuaidi tried to dominate the Chinese ride-hailing market by offering subsidies to drivers and heavy discounts to customers. In 2013, Kuaidi revealed a $100 million round backed by Alibaba and affiliates. A year later, Didi also disclosed a $100 million investment from Tencent and others.
Nevertheless, Tencent-backed Didi and Alibaba-backed Kuaidi announced a $6 billion merger in 2015 and as a result, a joint entity called Didi Chuxing was formed. The merger also put an end to an intense war between the two leading players in the ride-sharing space.
Meanwhile, Uber also stepped into China considering the rapidly growing ride-hailing market in the country. In 2014, Uber officially rolled out its standard UberX service in Shanghai and later expanded its services to other cities. However, Uber failed to catch up with Didi in the following two years, burning a significant amount of money. Finally, Uber stepped back from the region by selling its China operations to Didi in 2016.
Since then, Didi has been dominating the Chinese ride-sharing market. Didi has reportedly earned a profit of more than $1 billion in 2020, despite the difficult operating environment due to the Covid-19 pandemic.
On the other hand, Uber has been losing money lately, mainly due to the pandemic-driven lockdowns weighing on its revenue and partly due to its aggressive expansion strategy.
Uber owns a 15.4% stake in Didi. So if we see a Didi stock price coming soon, that could be beneficial to Uber. They used to own a larger stake but it was diluted because of new investments. However, given how things work, if we see a Didi IPO on the US stock exchange, that may impact Uber’s take in their company.
The demand for ride-sharing services stayed low during the pandemic. Uber also struggled to boost revenue during 2020 amid mobility restrictions imposed in different parts of the world. However, the company wasn’t able to turn a profit even before the pandemic due to several reasons.
One of those reasons was the idea of introducing autonomous car technology. The company had to burn massive cash while chasing that goal. They finally backed out from the endeavor in December when it announced the sale of its autonomous vehicle operations to San Francisco-based startup Aurora Innovations. The deal marked the end of the company’s ambitious target of introducing robot-powered taxis.
Meanwhile, Uber once again faced heavy criticism after reports surfaced that it’s discouraging drivers from seeking minimum wage payments in accordance with the latest court ruling in the U.K. The company is expected to incur millions of dollars in payments linked to a court verdict last week.
However, there are some areas where the company did extremely well in recent months. For instance, its delivery business jumped more than threefold in the fourth quarter. And to some extent helped the company to balance the negative impact of the Covid-19 pandemic on its overall business.
Earlier this month, Uber announced its financial results for the fourth quarter. It reported a net loss of $968 million for the three months ended December 31; narrower than a loss of $1.1 in the fourth quarter of 2019. On a per-share basis, the company reported a loss of 54 cents, versus a loss of 56 cents projected by analysts.
Nevertheless, Uber is hopeful that it’ll achieve profitability on an adjusted basis by the end of 2021. Revenue for the fourth quarter came in at $3.17 billion; translating to a decline of 16 percent from the same period of 2019. Gross bookings in the quarter fell 5 percent on a year-over-year basis.
Speaking on the quarterly performance, CEO Dara Khosrowshahi said in a statement, “While 2020 certainly tested our resilience, it also dramatically accelerated our capabilities in local commerce, with our Delivery business more than doubling over the year to a nearly $44 billion annual bookings run-rate in December.”
Uber’s delivery segment made significant contributions to the total revenue, generating sales of nearly $1.36 billion in the quarter, significantly higher than $418 million in the year-ago quarter.
The company has further solidified its position in the delivery space by acquiring food-delivery startup Postmates last year. Moreover, it has recently disclosed a deal to acquire Drizly, a beverage delivery service, in a transaction valued at $1.1 billion.
Uber shares have performed well in recent months despite several challenges faced by the company. Uber stock’s value rose more than 60 percent during 2020. However, the stock hasn’t gained any value so far in 2021.
Didi stock price isn’t available to us yet. But that doesn’t mean we can’t take advantage of other ride-sharing stocks. As the world opens back up and returns to normal, we could se a boon in this industry.