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China’s Didi Sees Significant Stock Drop After Crackdown

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China’s Didi Sees Significant Stock Drop After Crackdown
Source: The Japan Times

Didi Global, China’s largest ride-hailing operator, has seen its losses increase after Beijing ordered online merchants not to sell the company’s app.

Revenues in China declined by 5% in the third quarter, resulting in an operating loss of $6.3 billion (£4.7 billion) for the first nine months of the year.

The Chinese crackdown began only days after Didi debuted on the New York Stock Exchange in late June.

It announced earlier this month that it will relocate its stock listing from the United States to Hong Kong.

Didi has been one of the most visible targets of Beijing’s crackdown on the country’s technology industry in recent months.

The limitations imposed by Chinese authorities have had a significant impact on its stock price in the United States.

Since its debut on the New York Stock Exchange less than six months ago, the company’s stock price has dropped by 65 percent.

The business also stated in its most recent investor report that its board of directors has authorized it to seek a listing of its shares on the main board of the Hong Kong Stock Exchange.

“The firm is on track to meet its objectives and will provide investors with updates as needed,” Didi stated.

Didi’s announcement that it would leave the US stock market in early December coincided with the US Securities and Exchange Commission’s announcement that it had finalised rules that would allow US-listed foreign companies to be delisted if their auditors do not comply with regulators’ requests for information.

“The business will immediately begin delisting from the New York stock market and begin preparations for listing in Hong Kong,” the company announced at the time.

Didi also said on Thursday that Daniel Zhang, the chief executive of Chinese e-commerce giant Alibaba, had resigned from his position as a director on the company’s board of directors, which he has held since 2018.

Didi is facing stiff competition in its home market from ride-hailing services founded by carmakers Geely and SAIC Motor, in addition to being scrutinized by Chinese authorities.