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Did China Blindside Didi Global’s IPO Investors?

Sigma Investment Counselors

July 16, 2021

Two days after Didi Global Inc.’s initial public offering (IPO), China’s internet regulator issued several orders that have the potential to seriously limit Didi’s growth potential.  Needless to say, the market’s reaction was not good and the shares traded down.  There is some question as to whether Didi’s management had any awareness of possible issues with regulators before the offering, and whether they should have gone forward with the IPO.

It is going to take some time to sort out the issues raised by the Didi underwriting.

What shouldn’t take a long time, is an increased awareness of the hazards associated with investing in China or in companies regulated by China.

All comments and suggestions are welcome.

Walter J. Kirchberger, CFA®

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