Uber to benefit from a government takeover of Didi given its more than $5 billion stake, analyst says
Shares of Uber Technologies Inc.
rose 0.5% in premarket trading Friday, as the ride-sharing company was set to benefit from a potential investment in China-based rival Didi Global Inc.
by China’s government, according to Gordon Haskett analyst Robert Mollins. Didi’s stock jumped 4.8% ahead of Friday’s open after Bloomberg reported that China had proposed making an investment. Uber has disclosed that it owned about $6.3 billion worth of Didi’s stock at the end of 2020, and said it sold $207 million worth of its investment in January and had agreed to sell another $293 million worth of Didi shares in the first half of 2021. “If the Bloomberg article proves to be true, we see this as a positive for Uber,” Gordon Haskett’s Mollins wrote in a note to clients. “Uber has been very upfront about wanting to monetize its stake in Didi and we see a transaction with Beijing as a way to sell a ~$5B stake in the company without driving Didi’s share price down as a result of selling on the open market.” Uber’s stock has dropped 15.0% over the past three months through Thursday while the S&P 500
has gained 8.2%.