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Shares of Chinese ride-hailing app Didi have plummeted more than a third from their peak after debuting on the New York Stock Exchange just two weeks ago as the Chinese government prevents the company from taking on new customers.
Didi warned investors Monday that a crackdown from China’s cybersecurity regulator — which revealed last week it would remove the company’s apps from app stores and accused the company of improperly using customer data — will hurt the company’s revenue.
The regulator’s curiously timed move comes just two weeks after Didi raised more than $4 billion through its late June US debut, with shares trading as high as $18.01 in the days following the offering, according to MarketWatch data.
Chinese regulators first announced they were investigating the company just two days after Didi’s debut — and the company’s stock price has not recovered since.
As of Monday morning, Didi shares were trading at $11.37 — more than 30 percent lower than their initial opening price of $16.65 and roughly 37 percent lower than their peak of $18.01.
Didi did not immediately reply to a request for comment.
Wedbush Securities managing director Dan Ives said that regulators’ crackdown on Didi shows US investors need to exercise caution when dealing with Chinese companies.
“Big brother is watching from Beijing and for Didi investors this has been a major shot across the bow from regulators,” Ives told The Post. “There appear to be more twists and turns around the corner and that is not good news for the Didi bulls.”
Didi — which bought out Uber’s unprofitable China operation in 2016 — is not the first Chinese tech giant to face the wrath of regulators. Late last year, China suspended a planned $37 billion IPO by e-commerce giant Ant Group, shocking investors.
Shortly afterward, Chinese regulators said they were conducting an antitrust probe of the company and Ant Group founder Jack Ma went into hiding for months.
Chinese regulators also said last week they are investigating two lesser-known Chinese companies that are traded in the US — trucking company Full Truck Alliance and recruiting platform Kanzhun.
“The walls are starting to cave in from a regulatory perspective in Beijing,” said Ives.
With Post Wires
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