Didi’s stock tumbled Friday after China’s Cyberspace Administration suspended the registration of new users from the company.
The suspension comes just two days after China’s largest ride-hailing service, which forced Uber out of mainland China five years ago, went public on the NYSE in the biggest US share offering by a Chinese company since Alibaba debuted in 2014. China put the suspension in place “to prevent the expansion of risk” during a “cybersecurity review” into the company, according to a statement from the country’s cyberspace administration. It is unclear why the probe into “cybersecurity” against Didi has been launched.
Before the review, the company finished its first day of trading Wednesday at $14.14, 1% higher than its initial public offering price at $14. The stock climbed to a high of $18 during the trading session. At Wednesday’s closing price, Didi was valued at nearly $70 billion. Shares were down 8% to just above $15 Friday. Didi’s debut on the NYSE and the “cybersecurity review” come amid a broader crackdown on Big Tech in China. Several tech companies in the past few months have faced investigations for alleged monopolistic behavior or breaches of customer rights leading to record fines and massive overhauls. Chinese President Xi Jinping has endorsed the probes, setting regulatory crackdowns as one of the country’s top priorities in 2021, and he has continued to call on regulators to scrutinize tech companies. In April, Alibaba, the online shopping giant co-founded by Jack Ma, was fined a record $2.8 billion after antitrust regulators concluded the company had behaved like a monopoly. Days after the fine was issued, Ant Group, another part of Jack Ma’s business empire, was ordered to to overhaul its operations and become a financial holding company supervised by the central bank.