Didi is to delist itself from the New York Stock Exchange (NYSE) in favour of a Hong Kong listing, just five months after its market debut.
The news comes as a result of massive pressure from Chinese regulators, who were angered by ride-hailing giant’s decision to list in the US.
Didi carried on with its $4.4 billion US IPO, despite being asked to put it on hold while a review of the company’s data practises was carried out by regulator Cyberspace Administration of China (CAC).
The CAC then ordered app stores to remove 25 of Didi’s mobile apps and told the company to stop registering new users, claiming that the app was threatening national security and not serving in the interest of the public.
Didi is still under investigation by regulator.
“Following careful research, the company will immediately start delisting on the New York stock exchange and start preparations for listing in Hong Kong,” Didi announced on its Weibo account on Friday.
The announcement prompted shares to rise 15 per cent in pre-market trading.
The move serves an indicator of just how much influence the Chinese regulatory sector posses, an industry that Alibaba’s founder Jack Ma criticised, resulting in him not being seen for a number of weeks.
Didi’s withdrawal will likely discourage further other Chinese tech firms from listing in the US.
“Chinese ADRs face increasing regulatory challenges from both U.S. and Chinese authorities,” Megatrust chief executive Wang Qi told Reuters.
“For most companies it will be like walking on eggshells trying to please both sides. Delisting will only make things simpler.”