More rumors about a potential state takeover of Didi Chuxing, the troubled Chinese ride-share giant which remains embroiled in a government investigation into its handling of sensitive personal data belonging to its riders, emerged Friday morning when a Bloomberg reporter tweeted about a plan for the city of Beijing to take Didi "under state control."
It's not clear exactly what the arrangement would look like, or how Didi's shareholders might fit into it, and it's still possible that Didi might deny the report, as it has denied several other rumors about its post-IPO plans that have surfaced in the American press (like a rumor about the firm taking itself private first reported by WSJ that sent Didi shares surging in premarket trading).
Didi shares were up nearly 8% in premarket trading on Friday, before the report about a potential state takeover hit the tap and caused shares to retrace most (but not nearly all) of that move.
But according to Bloomberg's Tom Mackenzie, some of the details might include handing a stake to Shouqi, a competing ride-share firm that's part of Beijing Tourism Group. The new "golden share" consortium would have veto power, along with options for board seats.
It's still not clear whether this plan has been approved by government officials.
Details: plan would see competing ride-hailer Shouqi - part of Beijing Tourism Group - & other Beijing firms take stake— Tom Mackenzie (@TomMackenzieTV) September 3, 2021
- 'golden share' consortium with veto power + board seat is an option
- unclear if plan will be approved by snr govt officials
via @business #Didi #China
As we await more details, let's quickly recap all the changes Beijing has made in President Xi's crackdown on Chinese business over the past year: Beijing cut IPO of Ant Financial, suspended Didi's apps from the app store just days after its IPO, fined Alibaba, then forced it to contribute billions more to its "common prosperity" shakedown, created new data and algo rules for companies, practically shut down the private tutoring sector and banned foreign textbooks, declared war on celebrities and celebrity fandoms. And limited kids to 3 hours of video games per week.
Sounds to us like they're just getting started.