The duo behind Didi Global lost US$1.5 billion in wealth in two trading days as the Chinese ride-hailing company’s shares plummeted in New York after Beijing cracked down on the company, Bloomberg reports.
The net worth of Cheng Wei, co-founder and chief executive, dropped by about US$1.2 billion, according to the Bloomberg Billionaires Index. Jean Liu, co-founder and president, shed about US$300 million.
Didi’s American depositary receipts plunged by 24 percent over the period as China’s internet regulator opened a security review and then ordered stores to remove the Didi app. The State Council also issued a sweeping warning to China’s biggest companies, vowing to tighten oversight of data security and overseas listings.
The turmoil came just days after the Beijing-based company, which controls almost the entire ride-hailing industry in China, raised US$4.4 billion in its initial public offering last week. It buffeted global investors and complicated the picture for investing in the country’s tech giants.
Chinese regulators asked Didi as early as three months ago to delay its landmark U.S. IPO because of national security concerns involving its huge trove of data, according to people familiar with the matter. Prior to that, China’s antitrust watchdog ordered Didi to halt practices including arbitrary price hikes and unfair treatment of drivers.
Didi handed a group of senior executives and board members stock options worth billions of dollars before the IPO, free from the usual four-year vesting restriction and with a strike price Didi described in regulatory filings as “nominal.”