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Didi is the name of the company that in the past ousted Uber from China. After the initial public offering, it is valued at around 73 billion

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After an initial $ 4.4 billion public offering, Chinese chauffeur service company Didi Chuxing is poised to make its Wall Street debut. Founded in 2012, with 13 million active drivers per year and able to squeeze Uber out of the Chinese market, Didi had to increase the number of shares sold from the expected 228 million to 317 million, managing to place them at the higher expected price, which was included in the $ 13-14 range. The transaction thus gives Didi Chuxing, whose officially registered name is Xiaoju Kuaizhi, a valuation of approximately $ 73 billion on a fully diluted basis.

The increase in the number of shares was decided to satisfy the market demand, which has repeatedly signed orders in quantities greater than available. The IPO is conservative with respect to the initial goal of a valuation of 100 billion. The size of the deal was reduced prior to launch due to concerns about the company's future growth, which could be undermined by more industry regulation in the future.

In any case, an over allotment option remains open, ie the right to assign a number of shares higher than that of the offer, equal to an additional 43.2 million shares. Those distributed so far are "American depositary shares" (Ads), ie of a non-American company but held by a US bank and available to local investors: 288 million Ads shares are equivalent to 72 million class A common shares on Wall Street . Didi's will still be the largest Chinese listing in the United States after Alibaba's $ 25 billion one in 2014.

At the moment, the company is dominant in the market in China, but like so many other companies in the "ride-hailing" sector was not profitable. Last year it made $ 21.63 billion in revenues (-8%), but only in the last quarter it posted a profit of $ 30 million, reports Reuters. Furthermore, according to the agency, the Chinese State Administration for Market Regulation (Samr) is investigating any anticompetitive practices that Didi may have implemented in the past, especially to stifle smaller competitors. The transparency of the mechanism that decides the prices of the service is also being examined.

The company is supported, among others, by SoftBank, Tencent and Uber itself. Founded by Will Wei Cheng, a former employee of Alibaba, the president is Jean Qing Liu, cousin of Liu Zhen, former head of Uber China, beaten on the market after a price war between the two companies.

Business - 2 hours ago

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