The tentacles of the Chinese regulator crush the stock market dream of the taxi app Didi. The newcomer plummets by a fourth after being banned from the Chinese app stores.
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Ban does the share of the ‘Chinese Uber’, which only going to the fair last Wednesday from New York, with a fifth plunging. At the stock market debut last week, the shares in the Chinese company sold for 14 dollars. Tuesday’s opening rate was $11.77, nearly a quarter below Friday’s last official rate. At current valuations, the company is still worth 56.3 billion dollars, 18.3 billion less than at the IPO.
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Excellent debut
Last week the company made another excellent stock market debut. It raised $4.4 billion on its first day and shares rose 17 percent in the first two trading days.
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The Chinese cyber watchdog CAC appears to have advised Didi three months ago to postpone the IPO.
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It now appears that the cyber watchdog CAC Didi advised postponing the IPO three months ago. The Chinese authorities explicitly cited the importance of ‘national security’ because of the enormous wealth of data that Didi possesses. Although it does not seem to be about the protection of the Chinese consumer, but rather about Beijing’s fear that a cartload of Chinese data would fall into American hands. Didi went ahead with the IPO anyway, signing for the second-biggest debut of a Chinese company on the US stock exchange since web giant Alibaba floated on the New York Stock Exchange in 2014.
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Future
of recent approach of the authorities in Beijing against Chinese tech companies listed on the US stock exchange leads to great uncertainty amid a very nervous stock market climate for new entrants.
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‘Weibo is working on stock exchange exit’
In the negative climate for Chinese stock exchange companies, a first exit candidate would already emerge. According to the international news agencies Reuters and Bloomberg, Weibo
in the lee before his departure from the American stock exchange. The chairman of the social medium, Charles Chao, is said to be in talks with a Chinese state fund to delist the company. Alibaba is a major shareholder in Weibo.
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The news is denied by the company. The price of the Twitter clone, in contrast to Chinese slump on Wall Street, is 8.6 percent higher.
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The Chinese government announced on Tuesday that it will further tighten the rules for listing Chinese companies on foreign exchanges. The government will keep a closer eye on Chinese companies that list abroad and the rules will be updated. Listed companies are also explicitly held responsible for the security of their data.
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