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(Bloomberg) – Didi Global Inc. is becoming one of the worst IPOs of this year among foreign companies following announcements that China is considering additional sanctions – fines for delisting – – for the transport giant.
Didi shares fell nearly 10% on Thursday in New York, extending their decline to 26% below the initial public offering price set less than a month ago after Bloomberg reported that Chinese regulators are considering more severe measures.
Thirty-seven companies domiciled in China and Hong Kong have listed shares in New York at a record pace this year, raising nearly $ 13 billion. But the returns have yet to match the wave of activity. Shares are trading on average 9.1% below their IPO price, according to data compiled by Bloomberg.
The worst performing among deals to raise at least $ 500 million, Hong Kong-based vaping company RLX Technology Inc. is down about 50% from its IPO price in January. Next is Didi, followed by software maker Full Truck Alliance Co Ltd., which is trading 17% below the June 22 IPO price.
Didi’s struggles, amid a broader crackdown by Chinese regulators on tech companies, has already started to deteriorate the prospects for new Chinese listings in the United States this year. For some, including Loop analyst Rob Sanderson, equity weakness will likely fade over time.
“Although the trajectory of the event is unclear and not without further downside risk, we believe this period of uncertainty will prove to be a buying opportunity for the sector as a whole,” he said. written in a note Thursday.
The issue underlying China’s regulatory crackdown is over data sovereignty, Loop added, rather than a preferred listing location.
Read more: Didi Crackdown Sours Record Year for China IPOs in US: ECM Watch
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