Uber lost $ 2 billion in Didi’s stake this week on China crackdown

Uber’s one-time $ 9.4 billion stake in Chinese ridesharing giant Didi has halved in less than a month as China steps up threats against listed companies in the United States. More than $ 2 billion of the decline occurred this week.

U.S. depository shares of Didi, which debuted at $ 14 apiece in June on the New York Stock Exchange, plunged 21% on Friday to $ 8.02, after falling 11% a day earlier. They had reached a closing high of $ 16.40 on July 1, the second day of trading.

Uber owns around 12% of Didi, making it the second-largest investor behind SoftBank. Uber got its stake in 2016 after selling its Chinese business to Didi in exchange for a stake in its rival.

Didi’s IPO generated a lot of hype and a market cap of nearly $ 70 billion. But the honeymoon was short-lived, as within days of the offer, separate reports revealed that Chinese officials were conducting a cybersecurity review of the company and that Didi had been advised to postpone his registration and review the security of its network weeks before its publication.

The news got worse this week, after Bloomberg reported that Chinese regulators were planning sanctions against Didi, including a fine that could exceed the record $ 2.8 billion paid by Alibaba earlier this year after an anti -monopoly. Didi did not respond to requests for comment on the Bloomberg report earlier this week.

Sanctions could include delisting or withdrawing US stocks, Bloomberg reported, citing people familiar with the matter. Chinese lawmakers recently announced plans to limit the ability of domestic companies to register overseas.

While Uber is still showing a profit on its initial investment in Didi, valued at around $ 2 billion five years ago, it is falling rapidly. At the end of March, Uber valued the stake at $ 5.9 billion in its quarterly dossier. On Friday, it fell to $ 4.6 billion.

Uber is not the only company affected by Didi’s downfall. SoftBank’s stake fell from nearly $ 14 billion after the IPO to less than $ 8 billion. Tencent, the Chinese internet conglomerate, saw the value of its holdings in Didi drop to $ 2.5 billion from around $ 4.3 billion.

Uber shares held up this week, rising 2.3% to $ 47.26.