Latest Stock Pick: Didi

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What is Didi?

Over the summer, I spent some time researching new stocks to trade. One of the stocks that I found is called Didi, a Chinese ride-hailing company similar to Uber. They have recently opened in the U.S. for trading against China, an action that China did not take lightly as Didi has been going against government regulations for years, in an attempt to expand profits. As a result, China has been threatening Didi, causing a major dip in the stock from $14 to $8. 

Despite threats from China, many can expect Didi to stay in business as it is the largest ride-hailing company in the world, ahead of well-known competitors like Uber and Lyft. Didi has a captive audience now in China as Uber sold its Chinese-based operations to the company after fighting each other for dominance over China, one of the world’s largest economies; Didi’s only competitor in China was Uber, and with them out of the picture, Didi has full control. According to The New York Times, “Didi managers sent fake text messages to Uber drivers, saying that Uber had shut down in China and that they should work for Didi instead. Didi also sent recruits to be hired by Uber as engineers. There, they acted as moles, feeding information back to Didi.” 

Fortunately, the tricks paid off. In August of 2016, after the two ride-share companies had spent hundreds of millions in battle against each other, Uber announced that it will remove itself from China and sell to Didi. 


Didi Now vs. Competitors

Didi is younger but larger than Uber and Lyft. In June of 2012, Cheng Wei created Didi. Now eleven years later, the company is worth around $40 billion and was worth almost $75 billion at its peak in July 2021. 


Why Didi is a Worthwhile Investment

Didi is currently the largest ride-hailing company in the world and it is continuing to grow in some of the densest cities in the world. Many can project that Didi will not only come back from its dip but continue to grow past as ride hauling is the transportation of the future. 

Thus far, companies like Uber and Lyft have done well and have expanded ride hauling in the U.S.. It would only make sense for Didi to stay in business as China would continue to benefit by profiting heavily and having the largest ride-hailing company in their arsenal. 

Currently, the company is sitting at around $8, but I believe that this could increase massively. With a growing industry and easily-defeated competitors in America, Didi could grow from the world’s largest ride-hailing company to one of the world’s largest companies.

China has been threatening to take control of Didi, making investors skeptical. However, Didi has started to recover, making it a great opportunity to invest. According to The New York Times, “On average, 156 million people used Didi in China in the first quarter of this year, compared to the 98 million for Uber worldwide.” Didi has the possibility to grow massively outside of China as well, as it currently operates in 15 other international markets including South America, Japan, Australia, Russia, and South Africa. Soon, Didi will take over the entire international market, and then, it will encroach on the U.S. market.


*Not a financial advisor. All investment strategies and investments involve risk of loss. Nothing contained in this article should be construed as investment advice. Any reference to an investment’s past or potential performance is not, and should not be construed as, a recommendation or as a guarantee of any specific outcome or profit. The opinions expressed in this article are the author’s own. Harriton Banner does not endorse nor support views, opinions or conclusions drawn in this article and are not responsible or liable for any content, accuracy or quality within the article or for any damage or loss to be caused by and in connection to it.*