Will American lawyers end up making bigger profits from Didi Chuxing’s initial public offering (IPO) than investors? That this is even a question only days after the ride-sharing giant listed in New York is both ironic and a terrible look for Chinese tech companies.
There’s already buzz about class-action lawsuits over the regulatory chaos surrounding last week’s US$68 billion market debut. Chinese regulators waited until after the listing to announce a probe into China’s answer to Uber on national security grounds.
They ordered app stores to stop offering Didi’s platform, alleging it was illegally collecting users’ personal data. Investors are confused and bruised. Didi’s stock fell 5% after the news broke.
But some clarity is starting to emerge, suggesting that Didi was not being entirely open in the run-up to its listing. A Wall Street Journal report suggested mainland regulators had urged Didi to delay its $4.4 billion IPO, advice that went unheeded.