Didi’s business deteriorates sharply following government probe

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The business of Didi Chuxing, a Chinese ride-hailing service group, has declined rapidly as losses swelled and used up $ 4.4 billion raised in an initial public offering in New York just a few months ago.

Diddy’s operating loss expanded to $ 6.3 billion in the first nine months of this year, and revenues in China fell 5% in the third quarter compared to the same period last year.

Losses occurred after authorities stopped Didi from registering new users and domestic app stores Remove more than 2 dozen Of the company’s services a few days after the June IPO.

The financial results released Thursday were the first time investors could see how the Ride Hailing Group held up in the face of government investigations. To Diddy’s data security practices..

Regulatory scrutiny has forced the company to plan to withdraw from the US market just months after listing on the New York Stock Exchange.

Government data is Diddy’s Number of rides in China I declined after being scrutinized by the regulatory agency.

Beijing campaign too Thinned Diddy stock priceThis has decreased by more than 60% since the IPO, reducing market capitalization by approximately $ 38 billion. Diddy’s share price fell 8% on Wednesday and another 2% in after-hours trading.

The company also announced that Alibaba CEO Daniel Zhang will resign from the board of directors and be replaced by an e-commerce group lawyer.

Diddy’s investigation in Beijing has been going on for months, Stop the flow Other Chinese companies entering the US market, spurring authorities to deepen their efforts to curb the country’s Big Tech group.

As a US-listed foreign group, DiDi is not obliged to report quarterly results and announced the results for the second and third quarters together.

The results showed that Diddy’s cash position was also declining. The company had $ 7.2 billion in cash and timed bank deposits on its balance sheet at the end of March and raised at least $ 4.3 billion in its June stock sale. However, by the end of September, Didi’s account showed only $ 9.5 billion.

The company recorded an operating loss of $ 1.4 billion in the third quarter.

Diddy has tried to diversify from Ride Hailing in recent years, but the revenues announced have shown that they are facing challenges with increasing spin-offs to other business areas.

The company has reduced the value of its community group purchasing business, Chengxin, by $ 3.2 billion. The sector has been sacking workers and shrinking its business since the summer.

Diddy announced it this month Scheduled to be delisted We will pursue listing in Hong Kong from the US market.

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