Business

Didi fell 25% in pre-market trade after China’s crackdown

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The Didi stock fell in pre-market trading on Wall Street, leading to a decline in Chinese companies listed in New York following a downturn by the Beijing Internet watchdog that shocked investors.

Didi, who uses so-called U.S. depository receipts to trade in the United States, fell 25 percent in early business, a day after China’s Cyber ​​Administration announced an investigation into the company that travels . Tuesday’s session is the first opportunity for investors to react to the survey because U.S. stocks were closed for a public holiday on Monday.

The tumult came only a few days later Didi has debuted in U.S. markets on the larger list so far this year. The company’s shares rose to a peak of $ 18.01 in its first trading day last Wednesday, from the initial public offering price of $ 14. Then, they went up to about $ 12 in the New York pre-market after closing Friday at $ 15.53.

China’s cyber administration on Monday ordered Didi and two other Chinese companies that were recently listed in the United States to be removed from national app stores. He also announced an investigation into whether the companies had violated laws on the collection and use of personal data.

Didi said it will “strive to correct any problems, improve its risk prevention awareness and its technological capabilities, protect user privacy and data security, and continue to provide secure and convenient services to its users “. The group added it “expects that the elimination phase may have an adverse impact on its revenues in China.”

The intervention follows a move last week by the cyber-space administration to ban Didi from signing new users on its platform. That initial regulatory action triggered a 5 percent drop in shares on Friday.

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A person close to Didi said that two weeks before the US listing, two Chinese regulators had recommended that the company delay the IPO until it made a review of its data security.

The crackdown has called into question a number of listings planned in New York by Chinese companies.

Full Truck Alliance, one of the leading companies from Beijing, has dropped 15 percent in pre-market share. Other Chinese ADRs have supported more subtle falls. Baidu was down 2.4 percent, Alibaba close to 1 percent while JD.com was down 1.4 percent. Futures following the S&P 500 index of companies listed in New York have changed little.

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


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