Didi shares plunged 25% in pre-market trading after China’s crackdown

Didi’s share price plummeted in premarket trading on Wall Street, and after Beijing’s Internet regulators cracked down on investors, the share price of Chinese companies listed in New York fell.

The day after China’s National Internet Information Office announced an investigation into the ride-hailing company, Didi, which uses so-called American depositary receipts to trade in the United States, fell 25% in early trading. As the US stock market was closed on Monday for a public holiday, Tuesday’s trading was the first opportunity for investors to respond to the investigation.

The riots arrived a few days later Didi It debuted in the US market with the largest listing method so far this year. The company’s stock price soared to a peak of US$18.01 in the first day of trading last Wednesday, while the price of the initial public offering was US$14. Since closing at $15.53 last Friday, they have fallen back to about $12 in the New York pre-market market.

The Cyberspace Administration of China ordered Didi and two other Chinese companies that recently went public in the United States to be removed from domestic app stores on Monday. It also announced investigations into whether these companies violated the laws regarding the collection and use of personal data.

Didi said, “It will work hard to rectify problems, improve risk prevention awareness and technical capabilities, protect user privacy and data security, and continue to provide users with safe and convenient services.” The income in China has an adverse effect”.

Prior to this, the Cyberspace Administration took action last week to ban Didi from registering new users on its platform. Initial regulatory actions caused the stock to fall 5% on Friday.

A person close to Didi said that in the weeks before the US IPO, two Chinese regulators had advised the company to postpone the IPO until its data security was reviewed.

The crackdown caused Chinese companies to have doubts about a series of plans to go public in New York.

The All Truck Alliance, one of the companies under investigation in Beijing, fell 15% in its pre-IPO actions. Other Chinese ADRs experienced smaller declines. Baidu fell 2.4%, Alibaba was close to 1%, and JD.com fell 1.4%. The futures that track the S&P 500 Index of New York-listed companies have barely changed.

Reporting by Hudson Lockett and Tabby Kinder in Hong Kong and Sun Yu, Christian Shepherd and Yuan Yang in Beijing.

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