Didi Moves to Leave U.S. Stock Market Just Months After Huge Offering

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With 377 million active users a year in China and services in 16 other countries, Didi Chuxing has been celebrated in China as a homegrown tech champion. It vanquished its American rival, Uber, and bought that company’s Chinese operations in 2016. Promises to use its banks of data to unsnarl traffic and develop driverless car technologies made its executives icons as Chinese officials called for building a more innovative economy.

The delisting is likely to increase investor concerns about what seems to be a growing hostility by Chinese officials toward domestic companies that list shares on overseas exchanges. China’s taming of the internet giants picked up speed last year after regulators thwarted an I.P.O. of Ant Group, the fintech giant and Alibaba sister company.

Like Didi, Ant had gone ahead with a share listing despite a history of regulatory concerns. Other firms that may have eyed the United States’ red-hot equity market as a way to easily raise money are now likely to content themselves with China’s capital markets.

Beijing’s sudden clampdown on Didi jolted the company’s new Wall Street shareholders. A listing on Wall Street, such as Alibaba’s record-breaking one in 2014, was once seen in China as an ultimate validation of a company’s business achievements. Since its blockbuster initial public offering this summer, Didi’s share price has roughly halved in value.

In a series of rebukes to Didi, Chinese regulators followed up its megabucks listing with several regulatory slaps. Worried that the listing meant Didi might transfer sensitive data on Chinese riders to the United States, regulators forced the company to halt registering new users two days after the I.P.O. as they began a cybersecurity review of its practices.

Shortly after, officials ordered a halt to downloads of Didi’s main, consumer-facing application, before broadening the block to 25 more of the company’s apps, including its car-pooling app, its finance app and its app for corporate customers. At the time, it said the suspensions were due to problems with the collection and use of personal data, without elaborating.

Even before its listing, Didi was hard pressed to avoid regulatory scrutiny. At the end of March, regulators in the southern city of Guangzhou ordered it and nine other companies to compete fairly and not use consumers’ personal data to charge them higher prices.

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