SHAREHOLDER ALERT: Pomerantz Law Firm Reminds Shareholders with Losses on their Investment in DiDi Global Inc. f/k/a Xiaoju Kuaizhi Inc. of Class Action Lawsuit and Upcoming Deadline – DIDI
Pomerantz LLP
10 min read
NEW YORK, Aug. 31, 2021 (GLOBE NEWSWIRE) -- Pomerantz LLP announces that a class action lawsuit has been filed against DiDi Global Inc. f/k/a Xiaoju Kuaizhi Inc. (“DiDi” or the “Company”) (NYSE: DIDI) and certain of its officers and directors. The class action, filed in the United States District Court for the Southern District of New York, and docketed under 21-cv-06603, is a securities class action brought by Plaintiff under Sections 11 and 15 of the Securities Act of 1933 (the “Securities Act”) and under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) on behalf of persons and entities that purchased or otherwise acquired publicly traded DiDi securities: (a) pursuant and/or traceable to the registration statement and prospectus (collectively, the “Registration Statement”) issued in connection with the Company’s June 2021 initial public offering (the “IPO” or the “Offering”); and/or (b) between June 30, 2021 and July 21, 2021, inclusive (the “Class Period”).
If you are a shareholder who purchased or otherwise acquired DiDi securities (a) pursuant and/or traceable to the Registration Statement issued in connection with the IPO, and/or (b) during the Class Period, you have until September 7, 2021 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at newaction@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
DiDi purports to be the world’s largest mobility technology platform. Its four key components are: shared mobility, auto solutions, electronic mobility, and autonomous driving. The Company claims to be the “go-to brand in China for shared mobility,” offering a range of services including ride hailing, taxi hailing, chauffeur, hitch, and other forms of shared mobility services.
On June 10, 2021, DiDi (then named Xiaoju Kuaizhi Inc.) filed a registration statement on Form F-1 with the SEC to register its Class A ordinary shares, which, collectively with subsequently filed amendments on Forms F-1/A and F-1MEF, a registration statement on Form F-6, and a June 30, 2021 prospectus on Form 424B4 (the “Prospectus”), forms part of the registration statement for the Company’s IPO (the “Registration Statement”).
In the IPO and pursuant to the Registration Statement, including the Prospectus, the Company sold approximately 316,800,000 American Depositary Shares (“ADSs” or “shares”) at a price of $14.00 per share, not including the underwriters’ option to sell an additional 47,520,000 ADSs. The Company received proceeds of approximately $4,331.6 million from the Offering, net of underwriting discounts and commissions.
The complaint alleges that the Registration Statement was materially false and misleading and omitted to state material adverse facts. Throughout the Class Period, including in the Registration Statement, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (i) DiDi’s apps did not comply with applicable laws and regulations governing privacy protection and the collection of personal information; (ii) the Cyberspace Administration of China (“CAC”) had already asked DiDi weeks or months prior to the IPO to delay its IPO to conduct a self-examination of its network security and because of national security concerns; (iii) the Company was likely to incur heightened regulatory scrutiny and adverse regulatory action by ignoring the CAC’s request to postpone the IPO; (iv) as a result of the foregoing, DiDi’s apps were reasonably likely to be taken down from app stores in the People’s Republic of China (the “PRC” or “China”), which would have an adverse effect on its financial results and operations; and (v) as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
On July 2, 2021, multiple news outlets reported that the CAC had posted an announcement that the CAC had launched an investigation into DiDi to protect national security and the public interest.
Also on July 2, 2021, DiDi issued a press release entitled “DiDi announces CyberSecurity Review in China,” confirming that the Company was under investigation and stating that “pursuant to the announcement posted by the PRC’s Cyberspace Administration Office on July 2, 2021, DiDi is subject to cybersecurity review by the authority.” The Company’s press release also states “[d]uring the review, DiDi is required to suspend new user registration in China.”
On this news, the Company’s share price fell $0.87 per share, or approximately 5.3%, to close at $15.53 per share on July 2, 2021, on unusually heavy trading volume.
On Sunday, July 4, 2021, DiDi issued a press release entitled “DiDi Announces App Takedown in China[,]” which announced, in relevant part, that the CAC ordered smartphone app stores to stop offering the “DiDi Chuxing” app because the DiDi app “collect[ed] personal information in violation of relevant PRC laws and regulations.” Though users who previously downloaded the DiDi app could continue to use it, DiDi stated that “the app takedown may have an adverse impact on its revenue in China.”
On July 5, 2021, The Wall Street Journal reported that “[w]eeks before Didi Global, Inc. went public in the U.S., China’s cybersecurity watchdog suggested the Chinese ride-hailing giant delay its initial public offering and urged it to conduct a thorough self-examination of its network security, according to people with knowledge of the matter.” Subsequently, Bloomberg and other sources reported on July 6, 2021, that the CAC had asked DiDi at least three months earlier to delay its IPO because of national security concerns.
On this news, the Company’s share price fell $3.04 per share, or 19.6%, to close at $12.49 per share on July 6, 2021, on unusually heavy trading volume.
On July 9, 2021, The Wall Street Journal published an article entitled “China Orders Stores to Remove More Apps Operated by Didi: Cyber watchdog says the apps illegally collect personal data” which reported, among other things, that “China ordered mobile app stores to remove 25 more apps operated by Didi Global Inc.’s [] China arm, saying the apps illegally collect personal data, escalating its regulatory actions against the ride-hailing company”; that “[t]he cyber watchdog also banned websites and platforms from providing access to Didi-linked services in China”; that “Didi said it will follow the authorities’ orders” and “guarantees personal data security”; that “[t]he latest regulatory actions could further dent Didi’s business in its home market, which the company relies heavily on for revenue”; and that “[s]ome rivals have already started marketing more aggressively in recent days in an effort to steal market share.”
On July 12, 2021, before market hours, the Company issued a press release entitled “Didi Announces Takedown of Additional Apps in China” which announced, inter alia, that “the CAC stated that it was confirmed that 25 apps operated by the Company in China, including the apps used by users and drivers, had the problem of collecting personal information in serious violation of relevant PRC laws and regulations”; that “[p]ursuant to the PRC’s Cybersecurity Law, the CAC notified app stores to take down these apps and cease to provide viewing and downloading service in China” and required the Company to “rectify the problem to ensure the security of users’ personal information”; and that “[t]he Company expects that the app takedown may have an adverse impact on its revenue in China.”
On this news, the Company’s share price fell $0.87 per share, or approximately 7.23%, to close at $11.16 per share on July 12, 2021, further damaging investors.
On July 16, 2021, The Wall Street Journal published an article entitled “China Sends State Security, Police Officials to Didi for Cybersecurity Probe” which reported, among other things, that “China sent regulators including state security and police officials to Didi Global Inc.’s [] ride-hailing business on Friday as part of a cybersecurity investigation”; that “[p]otential outcomes include financial penalties, suspensions of business licenses and criminal charges”; and that “[t]he large number of ministries participating in the probe also highlights the breadth of the data Didi holds and that is now coming under regulatory scrutiny.”
On July 18, 2021, The Wall Street Journal published an article entitled “In the New China, Didi’s Data Becomes a Problem” which reported on the amount and types of data the Company holds and compiles, including that, among other things, “[u]sers turn over their cellphone numbers, which in China are linked to their real names and identifications”; that “[t]hey also often voluntarily share photos, frequent destinations such as home and office, their gender, age, occupation and companies”; that “[t]o use other Didi services such as carpooling or bike sharing, customers might also have to share other personal information including facial-recognition data”; that “[d]rivers must give Didi their real names, vehicle information, criminal records, and credit- and bank-card information”; that “[t]he 25 million daily rides on its platform in China feed a database of pickup points, destinations, routes, distance and duration”; and that “a Guangdong province transportation official said the company hadn’t fully complied with regulations . . . .”
On this news, the Company’s share price fell $0.91 per share, or 7.6%, to close at $11.06 per share on July 19, 2021, further damaging investors.
Finally, on July 22, 2021, before market hours, Bloomberg published an article entitled “China Weighs Unprecedented Penalty for Didi After U.S. IPO” which reported, inter alia, that “Chinese regulators are considering serious, perhaps unprecedented, penalties for Didi Global Inc. after its controversial initial public offering last month”; that “[r]egulators are weighing a range of potential punishments, including a fine, suspension of certain operations or the introduction of a state-owned investor”; that “[a]lso possible is a forced delisting or withdrawal of Didi’s U.S. shares”; and that “Beijing is likely to impose harsher sanctions on Didi than on Alibaba Group Holding Ltd., which swallowed a record $2.8 billion fine[.]”
On this news, the Company’s share price fell $3.44 per share, or nearly 30%, over the next two trading days to close at $8.06 per share on July 23, 2021, further damaging investors.
As of the time the Complaint was filed, the price of DiDi ADSs continues to trade below the $14.00 per ADS Offering price, damaging investors.
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomlaw.com.
