There’s just no getting around it. Chinese ride-hailing giant DiDi Global (NYSE:DIDI) may soon be de-listed from the New York Stock Exchange (NYSE). Yet, there’s also some potentially positive news/gossip which could provide a reason to stay invested in DIDI stock.
As you may recall, in July 2021, the Chinese government initiated cybersecurity reviews/crackdowns of DiDi Global and a number of other China-based companies. Consequently, DiDi was restricted from registering new users. Moreover, Chinese regulators reportedly prohibited new downloads of DiDi’s app.
Not long afterward, some U.S.-based investors wondered whether DIDI stock would be de-listed from the NYSE. The shares are still listed on the NYSE today, but they’ve lost most of their value, having declined from a peak of around $18 to less than $2 recently.
Unfortunately, a recent update from Bloomberg tends to confirm the investors’ de-listing concerns. Reportedly, DiDi Global is indeed planning to de-list its U.S.-traded shares prior to finding a different exchange for the stock.
To make matters worse, a separate Bloomberg report indicates that senior Chinese officials may be calling for harsher punishments than the ones possibly being negotiated between DiDi Global and the Cyberspace Administration of China.
That Bloomberg report suggested that DiDi Global “will likely” end up trading on the over-the-counter pink-sheets market. This would, to many traders, be considered a demotion compared to DIDI stock staying on the NYSE.
It was also reported that DiDi Global has suspended plans for a Hong Kong listing. Moreover, it’s not known when that dispute might be resolved.
Still, not all of the recent news is negative. Apparently, China’s government said that it would support the nation’s economy and the development of Chinese technology companies. Plus, there are rumors that the Chinese government may meet with large technology companies to discuss the possibility of easing up on regulatory policies.
So, at least there’s a glimmer of hope that Beijing will relax in its relentless crackdown of companies like DiDi Global. This possibility shouldn’t prompt anyone to bet the farm on DIDI stock. Yet, holding a small share position isn’t a terrible idea now. After all, any further positive developments could result in a windfall for DiDi Global and its stakeholders.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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