Chinese ride-hailing company Didi Chuxing has filed for an initial public offering (IPO) in the US, says Bloomberg. It was always expected to list at some stage, but the end of Covid-19 has prompted the company to accelerate its plans. It wants to raise some cash to help pay for its continued expansion and hopes to achieve a valuation of $70bn-$100bn.
At first glance, Didi’s hope of a $100bn valuation “does not seem too far-fetched”, says Lex in the Financial Times. It would value the company at around five times 2020 revenues, lower than the eight times Uber and Lyft command.
However, this is “misleading”, since Didi uses gross revenue figures, without deducting drivers’ salaries, which is how Uber and Lyft calculate their revenue. Adjusting Didi’s figures to take this into account means that the stock trades at 19 times sales. With ride-hailing still a “cut-throat” business in China, and “regulatory risks at home and abroad”, investors face having to “endure a steeper fare if they want to go along for the ride”. Still, Didi’s goal of at least a $70bn valuation is not unrealistic given that its IPO is “highly anticipated” and the IPO market is set to be “scorching hot” this summer, says Corrie Driebusch in the Wall Street Journal.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Fund managers, venture capitalists and bankers have said that sentiment around tech companies is “even crazier than during the dotcom boom of the late 1990s”. Indeed, with other companies, including investment platform Robinhood, also set to hit the markets next month, things are “busier than they have been in decades at this time of year”.
-
Four buy-to-let home improvements that could boost sale value by up to £65,000Renovations to your property could boost its value by 24%, research suggests. We explain ways to improve your buy-to-let
-
ONS: UK house prices hit by September slump amid Autumn Budget uncertaintyThe latest Land Registry data shows Budget rumours are hitting the UK housing market
-
Who is Jared Isaacman, SpaceX astronaut and Trump's pick as NASA chief?Jared Isaacman is a close ally of Elon Musk and the first non-professional astronaut to walk in space. Now, he is in charge of NASA
-
Three solid British stocks going cheapOpinion Ian Lance and Nick Purves, fund managers at Temple Bar Investment Trust, highlight three British stocks with strong cash flows and robust balance sheets
-
Is now a good time to invest in Barclays?Barclays' profit growth is healthy, and the stock is cheap compared with its rivals
-
Profit from other investors’ trades with CME GroupCME Group is one of the world’s largest exchanges, which gives it a significant competitive advantage
-
Key lessons from the MoneyWeek Wealth Summit 2025: focus on safety, value and growthOur annual MoneyWeek Wealth Summit featured a wide array of experts and ideas, and celebrated 25 years of MoneyWeek
-
Defeat into victory: the key to Next CEO Simon Wolfson's successOpinion Next CEO Simon Wolfson claims he owes his success to a book on military strategy in World War II. What lessons does it hold, and how did he apply them to Next?
-
Aircraft leasing companies can lift investors' portfoliosThe aircraft leasing business is a safer way to cash in on air travel and its booming demand. David Prosser explains how it works and how to access it
-
8 of the best houses for sale with fishing rightsThe best houses for sale with fishing rights – from a Georgian property on the banks of the River Derwent, County Durham, to a restored mill house in Marlborough with fishing rights on the River Kennet
