Uber’s one-time $ 9.4 billion stake in Chinese ride-sharing giant Didi has been cut in half in less than a month as China intensifies its threats to U.S.-listed companies. billion of the drop occurred this week.
Didi’s US deposit shares, which debuted at $ 14 a piece in June on the New York Stock Exchange, fell 21% on Friday to $ 8.02, after falling 11% the day before. They had reached a closing high of $ 16.40 on July 1, the second trading day.
Uber owns about 12% of Didi, making it the second-largest investor behind SoftBank. Uber got its stake in 2016 after selling its Chinese business to Didi in exchange for shares in its rival.
Didi’s IPO came with a lot of enthusiasm and a market capitalization of close to $ 70 billion. But the honeymoon was short-lived, as separate reports emerged within days of the offer that Chinese officials were conducting a cybersecurity review of the company and that Didi had been advised to postpone his listing and review the security of his. network weeks before it went public.
The news got worse this week, after Bloomberg reported that Chinese regulators are planning punishments against Didi, including a fine that could exceed the record $ 2.8 billion Alibaba paid earlier this year following an antitrust probe. Didi did not respond to requests for comment on the Bloomberg report earlier this week.
Sanctions could include delisting or withdrawing US stocks, Bloomberg reported, citing people familiar with the matter. Chinese lawmakers have recently announced plans to limit the ability of domestic companies to list abroad.
While Uber is still showing earnings from its initial investment in Didi, valued at around $ 2 billion five years ago, it is falling rapidly. At the end of March, Uber valued the stake at $ 5.9 billion in its quarterly filing. As of Friday, it was down to $ 4.6 billion.
Uber is not the only company affected by the fall of Didi. SoftBank’s stake has dropped from about $ 14 billion after the IPO to less than $ 8 billion. Tencent, the Chinese internet conglomerate, has seen the value of its Didi holdings drop to $ 2.5 billion from about $ 4.3 billion.
Shares in Uber have held steady this week, rising 2.3% to $ 47.26.