Why DiDi Global got run over on Thursday – .

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Why DiDi Global got run over on Thursday – .


What happened

The largest ridesharing company on the planet, the DiDi Global (NYSE : DIDI), saw its share price drop more than 11% on Thursday. A Bloomberg article published that morning was the foot that held the company back.

So what

This article, crediting “people familiar with the subject”, reports that the Chinese authorities are considering imposing significant sanctions on DiDi. These sources said it would indeed be punishment for the company’s recent IPO in the United States, which it decided to pursue despite resistance from the Chinese cyberspace administration.

Image source: Getty Images.

A number of sanctions would be considered. The options include financial penalties, mandatory state entry as an investor, delisting of the company’s shares listed on the New York Stock Exchange, and suspension of certain operations. These deliberations are still in their infancy.

Three Chinese government entities as well as DiDi were contacted for comment on the article; none responded to requests.

Now what

DiDi’s initial public offering in the United States in late June was initially considered a success, with the company raising $ 4.4 billion through the offer. Since then, however, Didi and other Chinese companies listed on US markets have had targets painted on their backs. Didi’s mobile app was forcibly removed from app stores in China, depriving it of the ability to add new customers, and it now looks like new sanctions are on the way.

The Bloomberg article and the resulting impact on DiDi’s share price is a stark reminder of the risk faced by all Chinese companies with international ambitions – if they violate authorities in Beijing, they will suffer. the results.

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