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Didi shares surge after report that regulators are ending probes

 2 years ago
source link: https://www.cnbc.com/2022/06/06/didi-shares-surge-after-report-that-regulators-are-ending-probes.html
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Chinese ride-hailing giant Didi surges 50% after report that regulators are ending probes

Published Mon, Jun 6 20226:27 AM EDTUpdated 6 Hours Ago
Key Points
  • Shares of Chinese ride-hailing giant Didi surged more than 50% in premarket trade in the U.S. on Monday after The Wall Street Journal reported regulators are concluding investigations into the company.
  • Didi has been one of the worst-hit companies by Beijing's regulatory tightening and has been the subject of a cybersecurity probe since days after its U.S. IPO.
  • But there have been signs of regulatory easing from Beijing as China deals with economic fallout from the weekslong lockdown in Shanghai.

In this article

Budrul Chukrut | LightRocket | Getty Images

Shares of Chinese ride-hailing giant Didi surged more than 50% in premarket trade in the U.S. on Monday after The Wall Street Journal reported regulators in China are concluding investigations into the company.

The Journal report said authorities would lift a ban on Didi adding new users as early as next week and reinstate the company's app in domestic app stores, citing people familiar with the matter.

Didi shares jumped more than 50% in premarket trade.

Since the end of 2020, China has tightened regulation on its domestic technology sector in areas from antitrust to data protection. But there have been signs of regulatory easing from Beijing as China deals with the economic fallout from weeks of lockdown in Shanghai.

Didi has been one of the worst-hit companies as a result of Beijing's crackdown. Last year, the ride-hailing firm went public in the U.S. But just days after the initial public offering, Chinese regulators opened a cybersecurity probe into the company.

In July, the Cyberspace Administration of China accused Didi of illegally collecting users' data and ordered its app removed from local app stores.

The Journal reported that Chinese authorities will also end probes into two other U.S.-listed Chinese tech firms — Full Truck Alliance and Kanzhun — which were also under investigation.

CNBC reached out to Didi, Full Truck Alliance and Kanzhun outside office hours, and has yet to receive a response.

Chinese authorities along with the CAC told Didi and the other two firms about the plans to end the probes in a meeting last week, the Journal reported. Didi is expected to face a large fine, while the Full Truck Alliance and Kanzhun will face smaller ones, the Journal said.

In May, Didi revealed that it was being investigated by the U.S. Securities and Exchange Commission in relation to its IPO last year.

Didi shares have fallen about 85% since the PO price of $14. Didi said in December that it will delist from the New York Stock Exchange and seek to list in Hong Kong instead.

Read the full story from The Wall Street Journal here.


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