Is it Still Safe to Invest in Didi Global?

Horos Asset Management, an investment management firm, published its first-quarter 2022 investor letter – a copy of which can be downloaded here. Since the inception of Horos (May 21, 2018), Horos Value Internacional has returned 22.3%, below the 55.2% gain of its benchmark, while Horos Value Iberia has returned 8.1%, outperforming the 0.5% return of its index. Moreover, since 2012, the returns of this management team stand at 199% for the international strategy and 167% for the Iberian strategy, compared to 219% and 67% in their benchmark indices, respectively.  Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.

In its Q1 2022 investor letter, Horos Asset Management mentioned DiDi Global Inc. (NYSE:DIDI) and explained its insights for the company. Founded in 2012, DiDi Global Inc. (NYSE:DIDI) is a Beijing, China-based mobility technology platform with a $16.4 billion market capitalization. DiDi Global Inc. (NYSE:DIDI) delivered a 12.25% return since the beginning of the year, while its 12-month returns are down by -31.93%. The stock closed at $3.39 per share on June 27, 2022.

Here is what Horos Asset Management has to say about DiDi Global Inc. (NYSE:DIDI) in its Q1 2022 investor letter:

Didi Global (the so-called Chinese Uber) recently announced that on May 23 it will vote at an Extraordinary General Shareholders’ Meeting on whether the company will continue to be listed on the U.S. stock exchange. In addition, it communicated that, although it is considering alternatives, it has no plans to list on other markets before its shares are delisted in the United States. Investor reaction was swift, with the company’s share price tanking by around 20% in a single day.

In the case of Didi Global, the accusation by the Cyberspace Administration of China that its IPO was conducted without completing a state data security audit is having an even greater impact. This has led to significant pressure from the government, cancelling many of the company’s mobile apps and hurting its business. All in all, Didi Global has collapsed by 87% since its IPO just under a year ago. Although some media commented that Didi Global would possibly recover these apps once it was delisted in the United States, it seems that the Chinese government is not very happy with the fines that were agreed between the company and the CAC, which may explain the delay in its potential listing on the Hong Kong Stock Exchange. This is certainly a clear indication of the extent to which China is willing to preserve certain information from the scrutiny of the United States.”

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Our calculations show that DiDi Global Inc. (NYSE:DIDI) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. DiDi Global Inc. (NYSE:DIDI) was in 15 hedge fund portfolios at the end of the first quarter of 2022, compared to 21 funds in the previous quarter. DiDi Global Inc. (NYSE:DIDI) delivered a 68.66% return in the past 3 months.

In March 2022, we also shared another hedge fund’s views on DiDi Global Inc. (NYSE:DIDI) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.

Disclosure: None. This article is originally published at Insider Monkey.