Uber to Sell Didi, China Market Has Little Transparency, Says CEO

The US firm pulled out of China in 2016 after losing more than $1 billion in a year due to a price war with Didi. It eventually sold its China operations to Didi in exchange for a stake.

According to a filing by Didi in June, Uber owns 12.8% of Didi.

“Our sister stakes that we don’t believe are strategic. They’re a competitor, China is a difficult environment with very little transparency,” Uber chief executive Dara Khosrowshahi said in a virtual fireside chat with a UBS analyst.

Khosrowshahi said that the company is in no hurry to sell the shares. “Bets like these we want to monetize smartly over time.”

He noted that many of the companies in which Uber has a stake recently went public and are still subject to a lockup period — when investors can’t sell stock at the time of listing — adding that Uber released some stake for strategic reasons. Will stay

Didi did not immediately respond to a request for comment on Wednesday.

Shares of Uber closed up 4.3% at $37.26 after Khosrowshahi’s remarks on Tuesday. He also said that last week Uber had its best week so far in terms of company-wide gross bookings across its ride-hail and food delivery operations.

But overall, ride-hail trips remained about 10% below pre-pandemic levels, the CEO said.

By the end of the third quarter, Uber had invested about $13.1 billion in other companies, including $4.1 billion in Didi.

Some investors have become concerned that Uber is holding onto these investments and sending a signal to the market that a stake in other companies is more attractive than Uber’s putting free capital into its operations.

Uber’s operating business posted profitability on an adjusted earnings basis for the first time last quarter, but its sister stake posted a net loss of $2.4 billion in the third quarter.

Shares of Didi, which has been troubled by investigations into its data practices by Chinese regulators, are down about 53% from their June 30 initial public offering price.

Under pressure from Chinese regulators, Didi said earlier this month that it would withdraw from the US stock exchange and pursue listing in Hong Kong.

Uber also has stakes in Indian food delivery company Zomato Ltd, Southeast Asian rival Grab Holdings Ltd, self-driving company Aurora Innovation Inc and others. Grab and Aurora are also backed by Japan’s SoftBank Group Corp.

This story has been published without modification in text from a wire agency feed. Only the title has been changed.