Didi drives straight into politics

The news knocked an initial 9% off Didi’s $79bln market value

  
The logo of Didi Chuxing is seen at a Didi station in Beijing, China January 2, 2019.

The logo of Didi Chuxing is seen at a Didi station in Beijing, China January 2, 2019.

REUTERS/Jason Lee

(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)

LONDON  - Didi Global has hit a potential roadblock. Two days after its shares started trading in New York on Wednesday, China's cyberspace agency revealed a national-security related investigation into the ride-hailing giant. It’s one way for the Chinese Communist Party, which celebrated its 100th anniversary on Thursday, to show it’s still relevant.

The news knocked an initial 9% off Didi’s $79 billion market value, though the stock later recovered somewhat. The company was told it can’t add new users while the probe is ongoing. That’s a minor concern for investors for now. The longer-term question is what to read into the timing.

It’s almost as if the Chinese leadership can’t bring itself to block most companies from listing in the United States, as it effectively did with Alibaba’s financial offshoot Ant, but wants to send a message: However much money is raised – $4.4 billion in Didi’s initial public offering – and however wealthy insiders become on paper, they’re still beholden to the CCP. (By Richard Beales)

(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)

(Editing by Gina Chon and Amanda Gomez) ((SIGN UP FOR BREAKINGVIEWS EMAIL ALERTS: http://bit.ly/BVsubscribe))


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