U.S.-listed shares of major Chinese companies, including electric-car maker Nio Inc. and e-commerce giant Alibaba Group Holding Inc., tanked on Friday following news that ride-sharing company Didi Global Inc. plans to delist from the New York Stock Exchange.
American depositary receipts of Nio Inc.
which earlier this week reported rising November sales, were off 12% in late trading Friday, poised to end the week off more than 20%. Li Auto Inc.
another Chinese EV maker that reported November sales this week, fell 16%, putting it on track for weekly losses of around 13%.
ADRs dropped more than 8%, looking to end the week off 16%.
Didi late Thursday said it would start delisting on the NYSE “immediately” and start preparations for listing in Hong Kong. That decision comes after Didi raised $4.4 billion in an initial public offering in June. Didi was caught between simmering pressures from the Chinese government as well as U.S. regulators on U.S.-listed Chinese companies.
The news came as “no surprise,” said David Trainer, the chief executive of investment research firm New Constructs. The company “was and remains a terribly overvalued business.”
China does not want the U.S. to own any strategic assets, and the U.S. cannot allow companies that will not share their financials publicly to trade on U.S. exchanges, he said.
“Didi and many other major Chinese stocks are not likely to last in the U.S. for much longer,” Trainer said.
Their drops also came amid broad weakness in the U.S. stock market after a weaker-than-expected November jobs report.