Bloomberg and Victor Zhong

Didi Global inched down by 1.79 percent at US$5.50 (HK$42.9) in pre-market trading yesterday as the lock-up period for US shareholders in the Chinese ride-hailing giant ended.

The market is looking at whether its early investors SoftBank and Uber will sell the shares - potentially for a loss - or wait months for more clarity on Didi's plans to list in Hong Kong.

Regulatory crackdowns on both sides of the globe, culminating with the announcement of Didi's plans to de-list in New York, have weighed on the Chinese-ride hailing giant. It's lost US$40 billion in market value since the June initial public offering - a stunning blow for what was expected to be one of the largest and most successful deals in 2021.

Certain company directors and executives that hold shares as well as firms that invested in Didi ahead of the listing have been spectators to the stock's collapse, restricted from selling for a customary 180-day period after its public sale. Now, with lock-up ending yesterday, they have a decision to make: sell now - potentially for a loss - or wait months for more clarity on Didi's plans to list in Hong Kong.

"Once Didi lists in Hong Kong, the dark cloud of uncertainty will largely dissipate, which would be positive for the shares," Jason Hsu, founder and chief investment officer of Rayliant Global Advisors said.

Didi shares had closed down 0.5 percent in New York on Thursday to a record low of US$5.60.

Uber Technologies, which owned 11.9 percent of the company right after the IPO in June, isn't planning to sell immediately upon the expiration of the lock-up, according to a company spokesperson. Chances are other early investors also stay on the sidelines, according to analysts.

"Optically, it would be quite a bad look if insiders started reducing holdings materially with the plan for a delisting in the US and offering in HK in the new year so I wouldn't expect too many to be selling just yet," said to Matthew Kanterman, an analyst at Bloomberg Intelligence. "Insiders selling a significant number of shares given all of these uncertainties and risks would be a very bad message to the market."

The lock-up applies to company directors, executive officers and holders that own at least 90 percent of total share capital. SoftBank Group and Tencent (0700) were listed as holders as of June, while Didi's directors and executives collectively held about a 10 percent stake in the company, according to the IPO prospectus.

Didi has lost US$40 billion in market value. REUTERS

Didi slips, market holds breath as lock-up ends