Didi soars 28% in largest IPO debut for a Chinese firm since Alibaba, valuing ride-hailing firm at $86 billion

Didi Chuxing's D1 at the launch event in Beijing on November 16, 2020
President of Didi Liu Qing and CEO of DiDi Cheng Wei and at the D1 launch event in Beijing on November 16, 2020.


Shares of Didi soared as much as 28% in its IPO debut on Wednesday, lending the Chinese ride-hailing platform a valuation of about $86 billion.

The firm priced its IPO at $14 per share and raised about $4.4 billion in proceeds, making it the largest IPO for a Chinese firm since Alibaba in 2014. At the IPO price, Didi was valued at about $67 billion. The company sold 317 million shares, and had guided for an IPO price range of $13-$14.

Didi is the second largest ride-hailing app by market value in the world. Uber currently sports a valuation of about $93 billion, while Lyft trades at a $20 billion valuation.

The company generated $1.6 billion in losses on $21.6 billion in revenue in 2020, representing a year-over-year revenue decline of about 10% due to the COVID-19 pandemic, according to its SEC filings.

Didi sports a number of high profile investors, including Apple, which invested $1 billion in the ride-hailing company in 2016. Meanwhile, the SoftBank Vision Fund holds a 21.5% stake in Didi, while Uber and Tencent own a 12.8% and 6.8% stake in the company, respectively, according to Bloomberg.

Whether US investors will have a strong appetite for shares of Didi over the long-term is still up in the air, as some investors have been burned before by high profile IPOs of Chinese companies. Last year, Starbucks competitor Luckin Coffee plunged more than 80% after it admitted to fabricating $310 million in sales. The Chinese-based coffee chain eventually filed for Chapter 15 bankruptcy.

Additionally, both the Trump and Biden administration have followed through with banning certain Chinese companies from US stock market exchanges.

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