Didi App Download Suspended in China, Faces Lawsuit for Misleading Investor
10th July 2021 | Hong Kong
Didi Global, China’s largest ride-hailing service and the world’s largest mobility technology company, has its Didi’s app suspended from downloads in China for data violation. On 4th July 2021, just days after Didi Global IPO (30/6/21), Chinese authorities instructed app stores to disallow new users from downloading Didi’s app in China. The suspension caused Didi Global share price to decline 14% (9/7/21) since IPO and with Didi Global now facing a potential class action lawsuit for misleading investors (9th July 2021). (IPO ~ Initial Public Offering) View: Potential Class Action
” Didi App Download Suspended in China, Faces Lawsuit for Misleading Investor “
China Increased Scrutiny on Chinese Companies, Technology Firms
In recent times, China is increasing its scrutiny and oversight on Chinese companies seeking foreign listing (IPO) and technology companies, requiring Chinese companies to seek approval for foreign IPOand to undergo cybersecurity review. Chinese companies with more than 1 million users must apply for cybersecurity approval as the data and personal information could be exploited by foreign governments.
The new rules could impact companies such as TikTok (ByteDance) potential IPO. Chinese technology stocks Didi Global, Alibaba, Tencent, JD.com, Bilibili and Meituan’ share prices immediately declined.
In November 2020, Ant Group planned IPO that will raise $34.5 billion and create a Chinese financial technology giant with more than $300 billion market capitalization, was suspended by both Shanghai and Hong Kong Exchange. China regulators have reported Ant Group have failed in major issues including meeting listing conditions and information disclosure requirement.
In May 2021, Alibaba Group posted its first quarterly loss since IPO in 2014 with $1.17 billion losses for Q1 2021. The Q1 2021 earnings was hit by a $2.78 billion fine in April 2021 by China’s State Administration for Market Regulation Anti-monopoly Law, representing around 4% of Alibaba’s 2019 revenue.
Didi Global IPO
On 30th June 202, Didi Global IPO on New York Stock Exchange (NYSE) at the IPO price of $14, rising 1% on Day 1 with a market value of $68 billion (30/6/21, Wed). Didi Global share price opened at $16.65 (+18%), reaching a high of $18.01 (+29%), and a low of $14.10 before closing at $14.14 (+1% of IPO price $14). Didi Global and known as Didi Chuxing in China, was founded in 2012 in Beijing (China), receiving investments from Softbank Vision Fund and Tencent, and in 2016 bought Uber China with Uber becoming a key shareholder (12.8%) of Didi Global.
The IPO also created 2 self-made in CEO & founder Will Cheng Wei ($4.4 billion) and President Jean Liu Qing ($1.08 billion).
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