Nearly 600 IPOs rolled out globally in the second quarter, dominated by traditional listings while SPAC activity cooled, says EY

Didi Chuxing's D1 at the launch event in Beijing on November 16, 2020
Didi Global shares went public in the US in June.

  • 597 IPOs came online in the second quarter of 2021, the busiest quarter for that market in 20 years, said EY.
  • There were 59 SPAC IPOs during the period, a slowdown from 299 during the first quarter.
  • But SPAC activity is poised to pick up again in the second half of 2021.
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The second quarter of 2021 marked the most active for companies entering the public markets worldwide in more than two decades, with traditional IPOs leading the way while the market for SPACs slowed in the US, according to figures from consulting firm EY.

Didi Global as the biggest IPO by proceeds between April and June as the China-based ride-hailing service pulled in $4.4 billion as it launched on Nasdaq. Didi was one of the 597 IPOs that went live last quarter, and among the companies that went through a traditional IPO process. Such firms had the most IPOs, outstripping SPACs, or special purpose acquisition companies, the market for which boomed earlier this year and in 2020.

SPACs are so-called “blank check” firms that go public with only cash on their balance sheet. Their aim is to merge with or acquire a private company, allowing that business to skip the traditional IPO process to debut.

EY said there were 59 SPAC IPOs in the US that raised $12 billion in proceeds in the second quarter, a cooldown from the first quarter when there were 299 SPAC IPOs that raised $96.9 billion.

SPAC formation slowed in the second quarter in part on accounting guidance from the US Securities and Exchange Commission for SPAC-related companies, said EY.

“The guidance indicated that in some cases, SPACs should account for the warrants as liabilities rather than as equity. As a result, many SPACs had to restate their financial statements, a process that should have been completed by June,” the consultancy said in its report.

But activity in the SPAC IPO space should pick up in the third quarter, with nearly 300 SPACs on file that haven’t yet priced, indicating there are SPACs rushing to find suitable targets, said EY. “High-quality target companies could have stronger bargaining power that will enable them to secure more favorable terms,” it said.

Overall, the IPO market has been buoyed by ‘ample” liquidity in the financial systems stemming partly from ongoing government stimulus programs, as well as by a surge in equity markets and speculative and opportunistic transactions, EY said.

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Didi falls as Chinese officials send police to offices as part of sweeping cybersecurity probe

A receptionist wearing a mask looks up from a desk at Didi office in Beijing.
A receptionist looks up from an office for drivers of Didi in Beijing.

  • Didi shares dropped Friday after police and other regulators went to the ride-hailing app operator’s offices in Beijing.
  • The Chinese government sent a task force of seven units including the internet regulator for the on-site visit as part of a cybersecurity review.
  • Didi shares have slumped in the wake of the review, which was first launched earlier this month.
  • See more stories on Insider’s business page.

Shares of Didi dropped Friday after reports that police in China went to the offices of the ride-hailing company as part of a cybersecurity review that was launched just after Didi raised $4.4 billion in an initial public offering in New York.

A task force of seven ministries including the national security and public security ministries and the Cyberspace Administration of China entered Didi’s offices on Friday to conduct what is China’s first cybersecurity review, according to the South China Morning Post.

NYSE-listed shares of Didi fell 3% during the regular session after losing as much as 8.6% in premarket trade.

The on-site visit is part of what Chinese officials have said are efforts to prevent national data security risks and to maintain national security. The Cyberspace Administration of China, the country’s internet regulator, last week ordered online stores to pull Didi’s apps after determining the apps used data that was collected illegally by Didi.

Didi said two weeks ago when the probe was launched that it would cooperate. The review triggered a selloff, and the stock through Thursday had dropped by more than 12% since its June 30 IPO. Didi was worth as much as $68 billion following its trading debut, making it one of the biggest IPOs in the US in the last 10 years.

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GOP Sen. Marco Rubio slams Didi’s US listing as ‘reckless and irresponsible’ – and calls it an unaccountable Chinese company

marco rubio ufo report
Sen. Marco Rubio, R-Fla.

  • Sen. Marco Rubio blasted the “reckless and irresponsible” decision to grant Didi’s US listing in an FT interview.
  • He called Didi “unaccountable” as China’s government blocks US regulators from reviewing its accounts.
  • “That puts the investments of American retirees at risk and funnels desperately needed US dollars into Beijing,” Rubio said.
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Sen. Marco Rubio slammed the “reckless and irresponsible” decision to allow Chinese ride-hailing app maker Didi to list its shares on the New York Stock Exchange, speaking in a statement reported by the Financial Times Wednesday.

Rubio, one of the US government’s most vocal China critics, described Didi as an “unaccountable Chinese company,” and said Beijing’s regulatory crackdown on the tech provider, which sent the stock lower, highlights the risks for US investors.

Didi’s share price plunged more than 19% on Tuesday, after Chinese authorities at the weekend ordered app stores to remove its app from their platforms. The country’s internet regulator earlier launched a review of its data security, and ordered it to stop registering new users.

“Even if the stock rebounds, American investors still have no insight into the company’s financial strength because the Chinese Communist party blocks US regulators from reviewing the books,” Rubio told the FT. “That puts the investments of American retirees at risk and funnels desperately needed US dollars into Beijing.”

The type of business structure used by Didi “deprives foreign investors of vital legal protections they would otherwise enjoy through equity ownership,” the Council of Institutional Investors said in a 2017 paper.

The Republican senator’s comments suggest that Didi’s IPO saga could fuel new efforts by US lawmakers to place tougher hurdles in the way of Chinese companies seeking listings in the US.

Last year, former President Donald Trump signed legislation that banned Chinese companies from being listed on US markets unless they conformed to American accounting standards.

The “Holding Foreign Companies Accountable Act” applies to companies from any country, but the sponsors of the law are seen as targeting it at Chinese companies listed in the US, such as Jack Ma’s Alibaba, tech firm Pinduoduo, and oil giant PetroChina.

Didi’s stock was last trading 4% lower in the pre-market session on Wednesday around 6.30 a.m. ET at $11.97 per share.

Read More: Goldman Sachs names 30 stocks to buy for double-digit revenue growth in 2022 – and 4 sectors expected to beat the S&P 500’s sales growth

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Didi’s US shares plunge 25% after China cracks down on ride-hailing app, just days after $68 billion IPO

Didi Chuxing China ride-hailing app
Didi is China’s biggest ride-hailing app.

Chinese ride-hailing app Didi dropped as much as 25% on the US stock market on Tuesday after China cracked down on the company, only days after its blockbuster initial public offering in New York.

Didi’s US-listed shares were last down 21.98% by 9.50 a.m. ET, to $12.10. US stock markets reopened on Tuesday after Monday’s 4th of July holiday.

Chinese authorities on Sunday ordered app stores to remove Didi Chuxing, the country’s biggest ride-hailing company, from their platforms. The Cyberspace Administration of China cited serious violations in the collection and use of personal data.

The crackdown came less than a week after Didi’s shares started trading on the New York Stock Exchange in one of the biggest IPOs of the last 10 years. Didi hit the market on Wednesday, with shares closing at $14.14, giving the app a market capitalization of $68 billion.

The company said China’s move to lock out new users may have an adverse impact on its revenue in its home market.

Uber, which is the second-biggest US holder of Didi stock, fell 1.82% when markets opened.

Read more: POWER PLAYERS: These 9 Uber executives are fighting the company’s increasingly messy gig-economy policy battles

Shares of Full Truck Alliance and Kanzhun, two Chinese tech companies who also recently listed in the US, dropped 19.95% and 9.38% respectively. The declines came after China expanded its clampdown to put new restrictions on the two companies on Monday.

“China is cracking down on big tech, but the decision to remove [Didi’s] app from domestic platforms appears to be timed for maximum impact and embarrassment,” said Neil Wilson, chief market analyst at trading platform Markets.com.

“China’s Communist Party is bristling at the number of Chinese companies listing in the US this year, but there is a genuine concern at the heart of this – regulators are not impressed at the way Didi and other Chinese tech companies handle data.”

Axel Springer, Insider Inc.’s parent company, is an investor in Uber.

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Chinese regulators will tighten controls of domestic firms listed overseas following a cybersecurity probe of Didi

A Didi logo is seen at the headquarters of Didi Chuxing in Beijing, China November 20, 2020. REUTERS/Florence Lo/File Photo/File Photo
A Didi logo is seen at the headquarters of Didi Chuxing in Beijing on November 20, 2020.

  • Chinese regulators said they will tighten control of domestic firms listed overseas.
  • The move came after the Beijing-led cybersecurity probe against Didi, Reuters reported.
  • On Sunday, China said Didi “has serious violations of laws and regulations” in collecting and using personal information.
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Chinese regulators on Tuesday said they will tighten control of domestic firms listed overseas following a recent cybersecurity probe launched by Beijing against ride-hailing giant Didi Global, Reuters first reported.

China officials said they will ramp up the regulation of cross-border data flow, tighten measures on illegal activities in the securities market, and check the sources of funding for securities investments and control leverage ratios, according to Reuters, citing a statement by China’s cabinet.

Fraudulent securities issuance, market manipulation, and insider trading will all be punished, the statement also said.

The announcement comes after the probe of ride-hail giant Didi, which made its US debut on the New York Stock Exchange on June 30.

On Sunday, the Cyberspace Administration of China said that its investigation found that the Didi app “has serious violations of laws and regulations” in collecting and using personal information.

App stores were notified to remove Didi and “strictly follow the legal requirements.”

Didi, the world’s second-largest ride-hailing app by market valuation, said it would comply and make necessary changes.

Didi shares slumped as much as 25% in premarket trading Tuesday, days after its more than $4 billion listing in what was seen as the biggest US share offering by a Chinese firm since Alibaba’s IPO in 2014.

Weeks before, China had already urged Didi to delay its initial public offering, the Wall Street Journal reported.

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Didi plunges 30% in premarket trading after China cracks down on ride-hailing app, days after $68 billion US IPO

FILE PHOTO: The company logo of ride hailing company Didi Chuxing is seen on a car door at the IEEV New Energy Vehicles Exhibition in Beijing, China October 18, 2018.  REUTERS/Thomas Peter/File Photo
Didi Chuxing is China’s biggest ride-hailing app.

  • Didi shares plunged as much as 30% in premarket trading Tuesday after China cracked down on its app.
  • Didi Chuxing listed on the New York Stock Exchange on Wednesday in a $68 billion IPO.
  • Chinese authorities are taking a tough line with the ride-hailing app maker and other tech companies.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Shares of Chinese ride-hailing app maker Didi plunged as much as 30% in premarket trading on the US stock market on Tuesday, after China cracked down on the company only days after its blockbuster US initial public offering.

Didi’s American depository receipts then pared some of their losses to stand 20.99% lower at $12.27 as of 06.15 a.m. ET. US equity markets will reopen on Tuesday after Monday’s 4th of July holiday.

Chinese authorities on Sunday ordered app stores to remove apps from Didi Chuxing, the country’s biggest ride-hailing company, from their platforms. The Cyberspace Administration of China cited serious violations in the collection and use of personal data.

The crackdown came less than a week after Didi’s shares started trading on the New York Stock Exchange in one of the biggest IPOs of the last 10 years. Didi hit the market on Wednesday, with shares closing at $14.14, giving the app a market capitalization of $68 billion.

Uber, which is the second-biggest US holder of Didi stock, fell 1.37% in premarket trading.

Read more: POWER PLAYERS: These 9 Uber executives are fighting the company’s increasingly messy gig-economy policy battles

Shares of Full Truck Alliance and Kanzhun, two Chinese tech companies who also recently listed in the US, dropped 16.04% and 10.49% respectively in premarket trading. The declines came after China expanded its clampdown to put new restrictions on the two companies on Monday.

“China is cracking down on big tech, but the decision to remove [Didi’s] app from domestic platforms appears to be timed for maximum impact and embarrassment,” said Neil Wilson, chief market analyst at trading platform Markets.com.

“China’s Communist Party is bristling at the number of Chinese companies listing in the US this year, but there is a genuine concern at the heart of this – regulators are not impressed at the way Didi and other Chinese tech companies handle data.”

Axel Springer, Insider Inc.’s parent company, is an investor in Uber.

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China’s Didi Chuxing is eyeing a mega-IPO next quarter that values the ride-hailing service above $62 billion, report says

Didi Chuxing's D1 at the launch event in Beijing on November 16, 2020
Didi Chuxing’s D1 at the launch event in Beijing on November 16, 2020.

  • China’s Didi Chuxing is speeding up plans for its market debut and targeting a valuation above $62 billion.
  • The ride-hailing firm is targeting the summer of 2021 for its IPO, rather than the latter part of the year, Bloomberg said.
  • Japanese conglomerate SoftBank is Didi’s single largest existing investor.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Chinese ride-hailing firm Didi Chuxing is said to be speeding up plans for its initial public offering to make the most of the post-pandemic environment, according to Bloomberg.

Didi is aiming for an IPO as early as this summer, at a valuation above the $62 billion it secured at its last funding round, making it one of China’s most valuable tech firms, Bloomberg said, citing sources.

The company brought forward its IPO plans by a quarter, owing to China’s lead in controlling the COVID-19 crisis. It was previously targeting late 2021. But plans are in early stages, timing is still uncertain, and a venue for its market debut hasn’t been decided yet.

If Didi lists its shares in Hong Kong, the company could raise about $9 billion, potentially making its IPO one of the largest tech debuts of 2021, Bloomberg said.

Japan’s SoftBank, the biggest investor in China’s ride-hailing leader, would count Didi’s IPO as another victory, after profiting from a number of other high-value market debuts including Coupang and DoorDash.

The company is also said to be expanding its business by pushing into European markets. Bloomberg reported last month it could roll out its ride-hailing service in the UK, France, and Germany by the first half of 2021.

Didi didn’t immediately respond to Insider’s request for comment.

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