American ride-hailing company, Uber, is looking to sell some of its $6.3 billion stake in China's ride-hailing company Didi Chuxing.
Uber's stock price has fallen to $36.41 as of September 17th, compared to its initial price of $45 at the time of its IPO. The company is aiming to increase its stock price by selling some of its investments.
CEO of Uber, Dara Khosrowshahi is said to be discussing the sale with Didi Chuxing and SoftBank.
The two ride hailing giants came to a strategic agreement where the Didi Chuxing would acquire Uber's business in China. Both companies held equity of each other after the transaction back in August 2016.
Uber’s financial report for the second quarter of 2020 (released in August) showed that the company’s second-quarter revenue was $2.241 billion, witnessing a decrease of 29% year-on-year.
“Uber’s reported plan to sell a minority stake in Didi, and its proposal for a similar approach to Yandex, may help offset cash burn that’s compounded by a shift in bookings mix toward food delivery,” said Mandeep Singh, a senior analyst from Bloomberg Intelligence.
While Didi Chuxing has predominantly been based in China, the company has recently started expanding its presence to foreign markets as of late.
However, both Uber and Didi Chuxing have yet to comment on the matter.
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Journalist at BEAMSTART. I write about breaking business news in the region.
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