Didi Global’s (DIDI) - Get DiDi Global Inc. Report stock price surged on Thursday, jumping as much as 49% in premarket trading after The Wall Street Journal reported the Chinese ride-hailing giant was considering going private to placate Chinese regulators and compensate investors for losses.
Citing people familiar with the matter, the Journal reported that Beijing-based Didi has been in discussions with bankers, regulators and key investors about ways to resolve its regulatory woes since its troubled listing, including a tender offer for the publicly traded shares.
Didi on Chinese social-media platform Weibo responded Thursday, saying reports it is considering going private are “untrue” and it was cooperating with the Chinese government on cybersecurity checks.
Didi went public at the end of June, raising $8 billion, but then revealed eight days later that it was being investigated by Chinese regulators in a move TheStreet’s Jim Cramer dubbed “chicanery.”
Bloomberg reported last week that Chinese regulators were considering serious, perhaps unprecedented, penalties for the Didi, including forcing it to delist from the New York Stock Exchange.
Beijing is likely to impose harsher sanctions on Didi than on Alibaba Group (BABA) - Get Alibaba Group Holding Ltd. Sponsored ADR Report, which recently paid a record $2.8 billion fine after a months-long antitrust investigation and agreed to initiate measures to protect merchants and customers from potential hacks.
For Didi, regulators are reportedly weighing a range of potential punishments, including a fine, suspension of certain operations or the introduction of a state-owned investor.
At last check, U.S.-listed shares of Didi were up 14.9% at $10.18. Prior to Thursday, shares of the Beijing company’s ADRs that trade on the New York Stock Exchange had fallen 37%.