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Some hedge funds may have lost millions on bets on Didi

09 Dec 2021 00:00:00 | Update: 09 Dec 2021 04:52:26
Some hedge funds may have lost millions on bets on Didi

Several hedge funds may have been bruised by bets on Didi Global Inc (DIDI.N), filings showed after the shares tumbled since the Chinese ride-hailing company announced plans to withdraw from the New York Stock Exchange.

Didi’s shares have tumbled 56.8 per cent from their June 30 IPO price. The slide accelerated after the company said on Friday it planned to delist from the New York Stock Exchange and pursue a listing in Hong Kong, bending to Chinese regulators angered by its US debut. read more

Hedge funds were invested in 94.4 million shares of Didi at the end of September, down 13.2 million shares from the previous quarter, according to US 13F filings compiled by industry tracker Symmetric.

It is not known if hedge funds had further reduced their investment since that time, but Reuters calculations show the 7.9 per cent fall in Didi’s shares between the end of September and Dec. 7 would have wiped a combined $60.9 million of value from those positions.

As of the end of September, 27 per cent of the value of the company was held by institutional investors owned by managers classified as hedge funds by Symmetric.

Symmetric notes that stocks with a high percentage of ownership by hedge funds may be susceptible to liquidations by those funds during stressed periods.

Among hedge funds that bought shares in the third quarter, Bridgewater Associates purchased almost 9 million, according to filings.

Penserra Capital bought 5.4 million in Didi’s stock while Owl Creek Asset Management purchased 1.7 million and Seven Eight Capital 537,145 shares, the filings showed. They showed that Paulson & Co added 1.6 million shares at the end of the third quarter while Seven Eight Capital purchased 537,145 shares.

Bridgewater, Penserra, Owl Creek, Paulson and Seven Eight did not respond to requests for comment.