Didi shares surge after report regulators are ending investigations

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Shares of Chinese ride-hailing giant Didi soared more than 24% during regular U.S. trading on Monday, after the Wall Street Journal reported that regulators in China were finalizing investigations into the company.

According to the Journal report, as soon as next week authorities would lift a ban on Didi adding new users and reintroduce the company’s app to domestic app stores, citing people familiar with the matter.

By Monday’s Wall Street close, Didi shares were up 24.32%.

Since late 2020, China has tightened regulation of its domestic tech sector in areas from antitrust to privacy. However, there have been signs of regulatory easing from Beijing as China copes with the economic fallout from weeks of lockdown in Shanghai.

Didi was one of the companies worst hit by Beijing’s crackdown. Last year, the ride-sharing company went public in the US, but just days after the IPO, Chinese regulators launched a cybersecurity investigation into the company.

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

The Journal reported that Chinese authorities will also end investigations into two other US-listed Chinese tech companies — Full Truck Alliance and Kanzhun — that are also under investigation.

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

Chinese authorities, along with the CAC, told Didi and the other two companies at a meeting last week that the investigation should end, the Journal reported. Didi is expected to face a hefty fine, while Full Truck Alliance and Kanzhun face smaller ones, according to the Journal.

In May, Didi announced it was under investigation by the US Securities and Exchange Commission in connection with its IPO last year.

Didi shares are down about 85% since the PO price of $14. Didi said in December that it would delist from the New York Stock Exchange and instead seek a listing in Hong Kong.

Read the full story from The Wall Street Journal here.

https://www.cnbc.com/2022/06/06/didi-shares-surge-after-report-that-regulators-are-ending-probes.html Didi shares surge after report regulators are ending investigations

Joshua Buckhalter

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