Didi Gains 1% After Second-Biggest U.S. IPO by Chinese Firm

(Bloomberg) -- Chinese ride-hailing giant Didi Global Inc. closed its U.S. trading debut up a mere 1% after raising $4.4 billion in an initial public offering.

The company's American depositary shares opened Wednesday at $16.65, rising as much as 29% from the $14 offer price. The shares closed at 14 cents above that price, though, giving Didi a market value of about $68 billion. Accounting for stock options and restricted stock units, the company's diluted value exceeds $71 billion.

That valuation is still well below the peak of a range that had stretched up to $100 billion as recently as a few months ago. The relatively modest showing by the onetime rival of Uber Technologies Inc. reflects both investors' increasing caution over pricey growth stocks, and China's recent crackdown on its biggest tech players.

Didi sold 317 million shares -- about 10% more than originally planned -- after marketing them at $13 to $14 apiece. The offering was the second-largest U.S. listing by a Chinese company, trailing only Alibaba Group Holding Ltd.'s $25 billion IPO in 2014, according to data compiled by Bloomberg.

Didi co-founder Cheng Wei has a 6.5% stake that's worth $4.4 billion after the debut, according to the Bloomberg Billionaires Index. Jean Liu, another co-founder, has a shareholding that's valued at $1.1 billion.

The ride-hailing company's IPO comes in a year that's on track to set a record for first-time share sales, with more than $365 billion raised globally so far. More recently, creeping inflationary pressures have injected volatility into the IPO market.

Didi is grappling with an antitrust probe into China's internet giants, a source of uncertainty for the firm and peers such as its major backer Tencent Holdings Ltd.

Antitrust Probe

Didi, which was among 34 technology firms ordered by regulators in April to correct excesses, warned in an earlier filing that it couldn't assure investors that government officials would be satisfied with its efforts or that it would escape penalties. In May, the antitrust watchdog ordered Didi and other leaders in on-demand transport to halt practices from arbitrary price hikes to unfair treatment of drivers.

The company plans to use the IPO funds to invest in technology, grow its presence in some international markets and introduce new products, according to its U.S. filings. It's planning to make its debut in Western Europe this year, Bloomberg News reported in February, and has invested heavily in so-called community buying, one of the hottest e-commerce growth areas in China.

$1.6 Billion Loss

Didi had a net loss of $1.6 billion on revenue of $21.6 billion last year, according to its filings with the U.S. Securities and Exchange Commission.

The offering was led Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co. In all, Didi appointed 20 advisers to manage the IPO. Its ADSs, four of which represent an ordinary share, are trading on the New York Stock Exchange under the symbol DIDI.

READ: Didi Climbs After Ending First Session Narrowly Above IPO Price

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