China’s Didi to Delist from NYSE Less Than 6 Months After its IPO

Chinese ride hailing company Didi announced this week that it will begin delisting from the New York Stock Exchange and has plans to list in Hong Kong instead.

The move comes less than 6 months after the company’s IPO in the U.S. Shares of Didi have plunged 44% since its IPO on June 30, and closed at $7.80 on Thursday.

The stock also saw its shares drop last week after reports surfaced that Chinese regulators have asked the company’s executives to formulate a plan to delist from the U.S. over concerns about leakage of sensitive data.

Both Softbank and Uber have massive stakes in the company, which combined own over 30% according to FactSet.

SoftBank shares in Japan were down 2.5% on Friday.

“I think China has made it clear they no longer want technology companies listing over in U.S. markets, because it brings them under the jurisdiction of U.S. regulators,” Aaron Costello, regional head of Asia at Cambridge Associates, said after the news was released.

“So our view has been that almost all of these U.S.-listed tech companies will relist either Hong Kong or the mainland,” Costello said to CNBC’s “Street Signs Asia.”

It was also this week that the U.S. Securities and Exchange Commission finalized rules that allow it to delist foreign stocks for failing to meet audit requirements.

Costello told CNBC he expects all the U.S.-listed Chinese tech companies to continue moving their primary listings to Hong Kong.

“This is actually part of the Chinese government’s plan — that they’re no longer comfortable with the U.S. as a jurisdiction for Chinese tech companies because of the regulatory scrutiny that U.S. put on them, and for the data security issues,” he said.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.