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DiDi Global Inc. Class Action Lawsuit - DIDI

Company Name
DiDi Global Inc.
Stock Symbol
DIDI
Relevant Period
June 30, 2021 to July 21, 2021
Motion Deadline
September 4, 2021
Court
Southern District of New York
32 days left to seek lead plaintiff status

Case Summary

The DiDi Global Inc. class action lawsuit charges DiDi (NYSE: DIDI), certain of its executives and directors, as well as the underwriters of DiDi’s June 2021 initial public offering (the “IPO”) with violations of the Securities Act of 1933 and/or Securities Exchange Act of 1934.  The DiDi class action lawsuit seeks to represent purchasers of: (a) DiDi American Depositary Shares (“ADSs”) pursuant and/or traceable to the registration statement and prospectus (collectively, the “Registration Statement”) issued in connection with DiDi’s IPO; and/or (b) DiDi securities between June 30, 2021 and July 21, 2021, inclusive (the “Class Period”).  The first-filed DiDi class action lawsuit was commenced on July 6, 2021 in the Southern District of New York and is captioned Espinal v. DiDi Global Inc. f/k/a Xiaoju Kuaizhi Inc., No. 21-cv-05807.  Similar lawsuits, captioned Chopra v. DiDi Global Inc. f/k/a Xiaoju Kuaizhi Inc., No. 21-cv-05973 (S.D.N.Y), Franklin v. DiDi Global Inc., No. 21-cv-05486 (C.D. Cal.), and Jiao v. DiDi Global Inc., No. 21-cv-06113 (C.D. Cal.), are also pending.

If you wish to serve as lead plaintiff of the DiDi class action lawsuit, please provide your information by clicking here.  You can also contact attorney J.C. Sanchez of Robbins Geller by calling 800/449-4900 or via e-mail at jsanchez@rgrdlaw.com.  Lead plaintiff motions for the DiDi class action lawsuit must be filed with the court no later than September 7, 2021.

CASE ALLEGATIONS: DiDi purports to be the world’s largest mobility technology platform. DiDi claims to be the “go-to brand in China for shared mobility,” offering a range of services including ride hailing, taxi hailing, chauffeur, and hitch.  Through its IPO, DiDi sold approximately 316,800,000 shares at a price of $14.00 per share.  Four DiDi ADSs represent one Class A ordinary DiDi share.  DiDi received proceeds of approximately $4,331.6 million from the IPO, net of underwriting discounts and commissions.

The DiDi class action lawsuit alleges that, throughout the Class Period, defendants made false and misleading statements and failed to disclose that: (i) DiDi’s apps did not comply with applicable laws and regulations governing privacy protection and the collection of personal information; (ii) as a result, DiDi was reasonably likely to incur scrutiny from the Cyberspace Administration of China (“CAC”); (iii) the CAC had already warned DiDi to delay its IPO to conduct a self-examination of its network security; (iv) as a result of the foregoing, DiDi’s apps were reasonably likely to be taken down from app stores in China, which would have an adverse effect on its financial results and operations; and (v) as a result, defendants’ positive statements about DiDi’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.

On July 2, 2021, the CAC revealed that it had launched an investigation into DiDi to protect national security and the public interest.  The CAC also reported that it had asked DiDi to stop new user registrations during the course of the investigation.  On this news, DiDi’s share price fell more than 5%.

Then, on Saturday, July 4, 2021, DiDi reported that the CAC ordered smartphone app stores to stop offering the “DiDi Chuxing” app because it “collect[ed] personal information in violation of relevant [People’s Republic of China] laws and regulations.”  Though users who previously downloaded the app could continue to use it, DiDi stated that “the app takedown may have an adverse impact on its revenue in China.”  Finally, on July 5, 2021, The Wall Street Journal reported that the CAC had asked DiDi as early as three months prior to the IPO to postpone the offering because of national security concerns and to “conduct a thorough self-examination of its network security.”  On this news, DiDi’s stock price fell an additional 19.6%, further damaging investors.

Additionally on July 5, 2021, The Wall Street Journal published an article entitled “Chinese Regulators Suggested Didi Delay Its U.S. IPO” reporting that “[w]eeks before Didi Global Inc. went public in the U.S., China’s cybersecurity watchdog suggested the Chinese ride-hailing giant delay its initial public offering and urged it to conduct a thorough self-examination of its network security.”  On this news, DiDi’s stock price fell approximately 4%.

Next, on July 12, 2012, DiDi announced that “25 apps operated by the Company in China, including the apps used by users and drivers, had the problem of collecting personal information in serious violation of relevant [People’s Republic of China] laws and regulations.  Pursuant to the PRC’s Cybersecurity Law, the CAC notified app stores to take down these apps and cease to provide viewing and downloading service in China.”  On this news, DiDi’s stock price fell approximately 7%.

On July 18, 2021, The Wall Street Journal published an article entitled “In the New China, Didi’s Data Becomes a Problem,” detailing the amount and types of data DiDi holds and compiles.  On this news, DiDi’s stock price fell an additional 7%.

Finally, on July 22, 2021, Bloomberg published an article entitled “China Weighs Unprecedented Penalty for Didi After U.S. IPO,” reporting that Chinese “[r]egulators are weighing a range of potential punishments, including a fine, suspension of certain operations or the introduction of a state-owned investor, the people said.  Also possible is a forced delisting or withdrawal of Didi’s U.S. shares, although it’s unclear how such an option would play out.”  On this news, DiDi’s stock price fell nearly 30% over the next two trading days, further damaging investors.

THE LEAD PLAINTIFF PROCESS: The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Didi ADSs pursuant and/or traceable to the Registration Statement issued in connection with DiDi’s IPO and/or DiDi securities during the Class Period to seek appointment as lead plaintiff in the DiDi class action lawsuit.  A lead plaintiff is generally the movant with the greatest financial interest in the relief sought by the putative class who is also typical and adequate of the putative class.  A lead plaintiff acts on behalf of all other class members in directing the DiDi class action lawsuit.  The lead plaintiff can select a law firm of its choice to litigate the DiDi class action lawsuit.  An investor’s ability to share in any potential future recovery of the DiDi action lawsuit is not dependent upon serving as lead plaintiff.

ABOUT ROBBINS GELLER RUDMAN & DOWD LLP: With 200 lawyers in 9 offices nationwide, Robbins Geller Rudman & Dowd LLP is the largest U.S. law firm representing investors in securities class actions.  Robbins Geller attorneys have obtained many of the largest shareholder recoveries in history, including the largest securities class action recovery ever – $7.2 billion – in In re Enron Corp. Sec. Litig.  The 2020 ISS Securities Class Action Services Top 50 Report ranked Robbins Geller first for recovering $1.6 billion for investors last year, more than double the amount recovered by any other securities plaintiffs’ firm.

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