How to Buy DiDi IPO Stock and Whether You Should

Didi, the so-called “Chinese Uber,” is preparing for a massive IPO this week on the U.S. market. The Chinese ride-hailing company is one of a few tech IPOs that could come close to breaking records.

DiDi Global Inc., previously known as Xiaoju Kuaizhi, Inc., or Didi Chuxing, filed to go public earlier in June. The company, which was ranked fifth on this year’s CNBC Disruptor 50 list, plans to list on the New York Stock Exchange. The DiDi IPO could fetch more than a $60 billion valuation.

When Beijing-based DiDi goes public this week, it’s expected to be one of the biggest IPOs so far in 2021. It could inject more than $4 billion in fresh capital into the company and give it up to a $60 billion valuation.

DiDi is the world’s largest mobility technology platform. The company provided services to over 493 million annual active users for the 12 months ended March 31, 2021. For the same period, the company reported $24.9 billion in revenue. In addition to ride-hailing, it offers bike-sharing, taxi, food delivery services, and more.

In 2016, after a long-fought battle, U.S. ride-hailing giant Uber sold the Chinese segment of its business to DiDi. TechCrunch reported that no matter what calculation format is used, DiDi’s valuation still falls several tens of billions of dollars short of Uber’s.

DiDi Global Inc. plans to offer 288 million shares of its common stock at a price range of $13–$14 per ADS (American depositary share). Each ADS or U.S. share is worth one-fourth of a Class A share of DiDi.

SoftBank’s Vision Fund entity is a principal stockholder of the company with a 21.5 percent pre-IPO stake. An Uber entity has a 12.8 percent pre-IPO stake, and Tencent Entities comes in with a 6.8 percent IPO stake.

Didi is going public this week and is expected to start trading on the NYSE on June 30. The managers on the offering are Goldman Sachs (Asia) as well as Morgan Stanley, J.P. Morgan, and China Renaissance.

According to Renaissance Capital, Temasek and Morgan Stanley plan to purchase a combined $1.3 billion of ADSs, or 32 percent of the total offering. It calculated DiDi’s fully diluted market value to equal $67.5 billion when using the midpoint of the proposed price range of $13–$14 per ADS.

The Chinese tech firm will be publicly listed on the NYSE, and all investors will be able to buy shares of DiDi under the symbol "DIDI." CNBC Mad Money host Jim Cramer was enthusiastic about DIDI stock for investors. He said, “You’ve got my blessing to bet on Didi. I would try to get as many shares as you can.”

Cramer also said that DiDi’s valuation seemed reasonable to him. He doubted that Chinese regulators or antitrust concerns would present much of a problem for the company. SoftBank-backed Grab is a ride-hailing company in Southeast Asia that provides some competition to DiDi.