A net loss of $2.4 billion in the third quarter, Uber intends to sell its stake in Didi

Abstract: The prospectus submitted by Didi shows that Uber holds 12.8% of Didi's shares

Following Didi's announcement in early December that it would delist from the New York Stock Exchange, Uber began considering selling all of its shares in Didi.

On December 14, Uber CEO Dara Khosrowshahi said Uber would sell its current 12.8 percent stake in Didi and other non-strategic assets. Uber shares rose 4.3 percent on the day, closing at $37.26.

"We don't see Didi's stake as strategic. For Uber, they are competitors. In a virtual fireside chat with UBS analysts, Kos Rosassi said. Uber burned more than $1 billion a year in a price war with Didi, but eventually Uber exited China in 2016 and sold its China business to Didi in exchange for some shares.

A prospectus filed by Didi in June showed that Uber owned 12.8 percent of Didi. At that time, Didi was listed on the New York Stock Exchange, and due to strong investor interest, the issuance of Didi shares increased by 10% on the eve of the listing to 316.8 million depositary receipts, and the first day of trading was a major victory, and the company's valuation once exceeded $80 billion, which was pleasing to Uber.

But just five months and three days later, Didi announced its withdrawal from the New York Stock Exchange, a news that not only caused Didi's stock price to plummet to $6.32, 53% less than the issue price at the time, but also hit the hedge fund that bet on Didi.

According to Reuters, as of the end of the third quarter of this year, hedge funds had a total of 94.4 million shares in their portfolios, and the decline in Didi's stock price on December 7 alone caused the hedge fund to lose $60.9 million, including well-known large companies such as bridgewater, the world's largest hedge fund, Owl Creek Asset Management and Paulson Fund.

In contrast, Uber's situation is even less optimistic.

Uber's total investment in other companies, including Indian food delivery company Zomato, Southeast Asian ride-hailing giant Grab and self-driving company Aurora, totaled $4.1 billion, including $4.1 billion in Didi, which led to a net loss of $2.4 billion for Uber's Stake in Didi in the third quarter, and Uber just made a profit for the first time on top of the adjusted operating income in the quarter.

In response, Kos Rosassi said the company is not in a hurry to sell Didi shares, he claims that many other companies in which Uber holds shares have recently gone public, and for strategic reasons, Uber will continue to hold some of the shares after the lock-up period of these companies: "Over time, we want to cleverly monetize these shares." ”

However, this has led some investors to become increasingly worried, and Uber's insistence on holding shares in other companies is a signal to the market that holding shares in other companies is more attractive than putting money into Uber's own business.

Perhaps to reassure the industry, Khosrowshahi also said in a statement on Tuesday that the number of rides is now about 10% lower than before the epidemic, and Uber last week was the best week ever in terms of total bookings for ride-hailing and food delivery businesses company-wide.

As of now, Didi has not commented on Uber's statement.