Following the US Didi stock listing, the Cyberspace Administration of China (CAC) removed the Didi application from China’s mobile App Store.Didi Global Inc (NYSE: DIDI) stock had dropped over 7% in pre-market to trade around .48 as of Jul 16, 2021, at 4:58 a.m. EDT. DIDI shares closed Thursday trading at .36, -2.06% according to market analytics provided by MarketWatch. The drop was attributed to news that officials from seven Chinese government departments visited the ride-hailing giant’s offices to conduct a cybersecurity review.Didi raised approximately .4 billion in a United States IPO late last month. The move has attracted notable attention from the US and Chinese regulators. Reportedly, the Cyberspace Administration of China (CAC) has accused Didi of illegally collecting
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Following the US Didi stock listing, the Cyberspace Administration of China (CAC) removed the Didi application from China’s mobile App Store.
Didi Global Inc (NYSE: DIDI) stock had dropped over 7% in pre-market to trade around $11.48 as of Jul 16, 2021, at 4:58 a.m. EDT. DIDI shares closed Thursday trading at $12.36, -2.06% according to market analytics provided by MarketWatch. The drop was attributed to news that officials from seven Chinese government departments visited the ride-hailing giant’s offices to conduct a cybersecurity review.
Didi raised approximately $4.4 billion in a United States IPO late last month. The move has attracted notable attention from the US and Chinese regulators.
Reportedly, the Cyberspace Administration of China (CAC) has accused Didi of illegally collecting user’s private information. The Chinese regulators had reportedly urged the ride-hailing app to delay listing on the United States exchange market.
On the other hand, US Sen. Marco Rubio regarded the decision to allow Didi to list on NYSE as ‘reckless and irresponsible. The push and pull from both regulators have pushed investors away from the Didi stock market thus the continued dip since the US listing.
Didi Stock and Fundamental Perspectives
Following the US Didi stock listing, the Cyberspace Administration of China (CAC) removed the Didi application from China’s mobile App Store. The move was a huge blow to the Didi customers and also the company’s business operations. Furthermore, China is a major contributor to its global market and also its revenue collection.
Market strategists predict more pain in the future for the Didi market should the regulators keep on slamming its operations. A senior analyst at Eurasia Group, Xiaomeng Lu, said that “This is the first high-profile use of China’s cybersecurity review mechanism. It also raises questions about the firm’s personal data collection practice.” He continued that “the timing of the action right after Didi’s record IPO suggests that Beijing is uncomfortable with large tech companies’ New York listings during a time of escalating tech tension between the two countries.”
Didi has a reported market capitalization of approximately $60.87 billion. The company faces stiff competition from other ride-hailing giant companies like Uber in the global market. However, the management has a chance to straighten up its relationship with different regulators in the foreseeable future.
As a technology-based company, Didi relies heavily on real-time customer data to not only expand its business but also provide better services. With the regulators on its watch, the company cannot progress easily and is likely to report a low income during the third quarter.
The Chinese government has been in a trade war with the United States since the Donald Trump administration. With several Chinese tech companies having been blacklisted by the United States government, the disadvantage continues to lie on the tech companies.
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