Years ago the United States Ridesharing giant Uber and its Chinese rival Didi were locked in a costly rivalry in the Asian nation. After financially tough competition, Uber sold its China-based business to Didi, focusing on other markets instead.
The two companies face off again, however, as Didi seeks registration in the United States. The company’s IPO filing was big news for SoftBank Vision Fund, Tencent and Uber, thanks to its stake in Didi in its previous transaction.
But Didi appears to be priced lower than Uber. By tens of billions of dollars, it turns out. And we don’t really know why.
This week, Didi said he would target an IPO price of $ 13 to $ 14 per share, with each share in U.S. markets worth a quarter of a class A share of the company. In more technical language, each ADR represents 25% of a class A ordinary share of Didi, if you prefer, so it is.
With 288 million shares to sell when it goes public in the United States, Didi could raise up to $ 4.03 billion, a whopping sum.
What is Didi worth between $ 13 and $ 14 per ADR? Using an undiluted number of shares, Didi is valued between $ 62.3 billion and $ 67.1 billion. Including shares issuable through vested options and the like, Didi could be worth up to $ 70 billion; Renaissance Capital calculates the mid-term valuation of the company using a fully diluted stock count at $ 67.5 billion.
Whichever number you prefer, Didi isn’t ready to challenge Uber’s own rating. Yahoo Finance valued Uber at $ 95.2 billion this morning.
Why is the Chinese company worth less than its old rival? Let’s dig into their numbers and find out.
Didi vs. Uber
As a reminder, Uber’s first quarter 2021 included adjusted revenue of $ 3.5 billion, an 8% gain from the previous year’s quarter. And Uber’s Adjusted EBITDA for the period was – $ 359 million.