After Beijing already told the ride-hailing platform to stop signing up new users and opened a data security review, China’s internet regulator fined Didi and other tech companies — including Alibaba — for failing to report merger deals in advance.
China’s antitrust authority has been scrutinizing the country’s internet industry with never-before-seen vigor. That means the company, its investors, and its underwriters could be in for even more unpleasant surprises.
Analysts looked at the signs that Didi could face additional scrutiny in China, where it has tussled for years with city officials over permits and licenses, and even in the United States, as it tries to tighten rules for foreign companies listed on stock exchanges. Shares of Didi lost a fifth of their value on Tuesday and fell again in early trading in New York on Wednesday.
“Even if the stock rebounds, American investors still have no insight into the company’s financial strength because the Chinese Communist Party blocks U.S. regulators from reviewing the books,” Senator Marco Rubio of Florida said.
