Search
  • Ernie Diaz

Didi DD, That’s All, Folks

Due diligence, in this case, for porky pigs looking to get fat off of what could easily be the biggest IPO since Alibaba, will consist of evaluating the commercial potential of China’s ride-hailing service.


Institutional investors in the LehmanBush network are looking high and low for sizeable pre-IPO blocks of Didi shares at a valuation of $50b. Meanwhile, Reuters reported last month that Didi would be seeking a $100b valuation. The few sellers out there, in the meantime, are generally asking $60b, with hefty fees associated, and underwriters Goldman-Stanley prognosticate “$70b, maybe $100b”. Where’s the sweet spot?


“If I were an underwriter, I’d stick to the low side,” says Jimmie Jeremejev. “As an investor, I wouldn’t be surprised at all if Didi IPOs at north of $100b, then has a sharp dip. Chinese tech companies are simply super-hot right now, and we believe there will be a lot of hype around the IPO that will translate into a surprisingly high valuation.”


In support of the high-side are two relatively recent developments: a local government deal to test robo-driving services in Guangzhou, and its expansion of delivery services from eight to nineteen Chinese cities.


“Didi is at the cutting edge of ride-hailing’s potential,” says Edward Lehman. “But lets not forget that pigs get fed; hogs get slaughtered.”

2 views0 comments

Recent Posts

See All

Too Big to Bail

We'd like to bear witness against the notion that Chinese giants are simply propped up by their government when they stumble. Sure, China's central bank and regulatory bodies shut Anbang down a few ye

Schools & Regulations

First they came for the tech companies, and we did not speak, for cybersecurity and monopolies are a thing. Next they came for the listed education companies, and we did not speak, for anyone in China

Free Money

It's just the same as with your therapist: the more you open up, the harder it is to stop. Opening up the economy led to 9%= GDP growth for decades, a golden era of prosperity. Anyone grateful? Nope.