Didi share rises on day one, although the rally is coming to an end

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WSJ.com: Markets

Didi Global Inc.’s stock rose slightly on the first day of trading after going public, with investors weighing the prospects of the Beijing-based rideshare company as it entered a hot IPO market.

Didi’s American Depositary Shares opened at $ 16.65 on Wednesday afternoon, 19% above their IPO price of $ 14. But the rally subsided that afternoon, and the stock closed 1% at $ 14.14. The company ended the day with a market cap of around $ 68 billion.

Still, earnings bucked the poor performance trend that had plagued multiple IPOs of other Chinese companies in the past few weeks, suggesting that investors are willing to overlook some risks to the high growth promise, and that Didi and his Underwriters wise at conservative pricing were the deal.

Didi raised roughly $ 4.4 billion in its IPO on Tuesday after valuing its shares at $ 14 each, which Dealogic says is the largest IPO for a Chinese company since Alibaba Group Holding Ltd. was listed. Some people around Didi’s deal originally opened up the opportunity to raise around $ 5 billion to $ 10 billion, according to a person familiar with the matter, but this was due to the recent poor performance of Chinese IPOs and the high volume of US-listed IPOs has now been cut back to investors.

This summer has been an unusually busy season for US-listed IPOs, as bankers, attorneys and investors say more money is likely to be raised by companies in June, July and August than ever before during that period. So far this week, 11 companies, not counting blank check companies, have raised more than $ 7.7 billion on their initial public offerings in what Dealogic says is the biggest week of the year by fundraising.

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