Didi surges on report it’s weighing going private amid regulatory pressure

Didi Global stock symbol
Didi Global raised $4.4 billion in its debut on the New York Stock Exchange.

  • Didi Global shares jumped Thursday after The Wall Street Journal reported the ride-hailing app was considering going private.
  • Didi said in a statement the report was “not true.”
  • Didi shares, which have been hurt by a Chinese data-security probe, were still trading below the IPO price of $14.
  • See more stories on Insider’s business page.

Didi stock soared Thursday following a Wall Street Journal report the ride-hailing company was considering going private to resolve problems that emerged after China launched a data-security investigation shortly after its recent US stock listing.

Didi denied the report, causing shares to pare some gains.

The article, citing unnamed sources, said Didi was weighing a go-private move to placate authorities in China and to compensate investors for losses incurred since its IPO priced at $14 a share launched on June 30. The shares had reached $18 then began falling after the Cyberspace Administration of China on July 2 started a data-security review of the company. The report said Didi has been in talks with bankers, regulators, and key investors about how to resolve issues surrounding the listing.

“DiDi Global … noted a Wall Street Journal article published today saying the company is considering going private. The company affirms that the above information is not true,” Didi said in a statement. “The company is fully cooperating with the relevant government authorities in China in the cybersecurity review of the company.”

NYSE-listed shares of Didi jumped as much as 45% to $12.88 in premarket trading following the WSJ report, then pared the gain to 17% after Didi denied the report.

A take-private deal involving a tender offer for Didi’s publicly traded shares was one of the preliminary options under consideration, the report said.

After launching the data-security review, the Cyberspace Administration of China told app-stores to take down Didi’s mobile app then later ordered the removal of 25 more aps run by Didi. Chinese regulators have also said they will tighten control of domestic companies listed overseas.

Didi raised $4.4 billion from its IPO of American depositary shares.

Read more: Chinese companies are using 2 giant loopholes to evade oversight on Wall Street

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Chinese education stocks plunge as Beijing reportedly wants to turn tutoring companies into non-profits

students in china
Primary school students attend a class in Beijing.

  • Shares of Chinese tutoring companies are crashing Friday after Bloomberg reported that Beijing is targeting the sector.
  • China is considering asking education tech companies in the $100 billion sector to turn into non-profits.
  • Shares of Tal Education Group and Gaotu Education were among those being hammered in the US market.
  • See more stories on Insider’s business page.

Shares of Chinese education companies sank Friday, losing more than half their value following a Bloomberg report that China may ask companies that offer school curriculum tutoring to become non-profits, a move that could severely damage the country’s $100 billion education technology industry.

Beijing is considering rule changes that could lead to platforms being blocked from raising capital or going public, the report said, citing unnamed sources. Listed firms will likely no longer be allowed to invest in or acquire education firms teaching school subjects and foreign capital investment into the sector may be banned, according to the report which also said an education ministry spokesman said relevant policies are still being formulated.

NYSE-listed shares of Tal Education Group, which runs after-school tutoring programs for primary and secondary school students, tumbled by 55% in premarket trade and New Oriental Education & Technology Group slid 62%. Gaotu Techedu, formally known as GSX Techedu, dropped 59%. In Hong Kong, Koolearn Technology sank 28%.

NYSE-listed shares of Alibaba fell 3% as the e-commerce heavyweight has invested in the online education industry.

The report said China is taking aim at the sector in part because parents pay expensive fees for tutoring and the country, in serving a top priority of lifting the birth rate, last month released measures aimed at encouraging births and lowering child-related expenses. China in June said couples will be allowed to have three children.

The potential threat to the education tech sector also comes as China has been cracking down on companies with listings in the US and foreign equity markets, with Beijing’s concerns ranging from data security and disclosure requirements. Investment banks are moving to steer Chinese IPOs away from the US market and into Hong Kong, according to a Financial Times report.

Ride-hailing giant Didi Global is among Beijing’s targets, with regulators launching a cybersecurity review just days after the company’s shares began trading in the US on June 30. Didi shares fell 13% early Friday, extending losses from Thursday on news that China is considering serious penalties for the company following its IPO.

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Didi falls as Chinese officials send police to offices as part of sweeping cybersecurity probe

A receptionist wearing a mask looks up from a desk at Didi office in Beijing.
A receptionist looks up from an office for drivers of Didi in Beijing.

  • Didi shares dropped Friday after police and other regulators went to the ride-hailing app operator’s offices in Beijing.
  • The Chinese government sent a task force of seven units including the internet regulator for the on-site visit as part of a cybersecurity review.
  • Didi shares have slumped in the wake of the review, which was first launched earlier this month.
  • See more stories on Insider’s business page.

Shares of Didi dropped Friday after reports that police in China went to the offices of the ride-hailing company as part of a cybersecurity review that was launched just after Didi raised $4.4 billion in an initial public offering in New York.

A task force of seven ministries including the national security and public security ministries and the Cyberspace Administration of China entered Didi’s offices on Friday to conduct what is China’s first cybersecurity review, according to the South China Morning Post.

NYSE-listed shares of Didi fell 3% during the regular session after losing as much as 8.6% in premarket trade.

The on-site visit is part of what Chinese officials have said are efforts to prevent national data security risks and to maintain national security. The Cyberspace Administration of China, the country’s internet regulator, last week ordered online stores to pull Didi’s apps after determining the apps used data that was collected illegally by Didi.

Didi said two weeks ago when the probe was launched that it would cooperate. The review triggered a selloff, and the stock through Thursday had dropped by more than 12% since its June 30 IPO. Didi was worth as much as $68 billion following its trading debut, making it one of the biggest IPOs in the US in the last 10 years.

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TikTok owner ByteDance has reportedly canceled its upcoming IPO as China cracks down on tech companies

TikTok app
  • TikTok’s owner ByteDance held off on offshore IPO plans after talks with Chinese officials, The Wall Street Journal reported.
  • ByteDance’s founder indefinitely shelved the plans in March.
  • China launched a security review of Didi two days after the ride-hailing app went public in the US in June.
  • See more stories on Insider’s business page.

ByteDance, the Chinese company that runs the popular short-form video app TikTok, will hold off on plans for an offshore listing after Beijing authorities told the company to address data-security risks, according to The Wall Street Journal.

ByteDance made the decision in March to postpone its intentions of offering all or a portion of its businesses in the US or Hong Kong, the report published Monday said, citing sources familiar with the matter. The company was valued at $180 billion in a round of funding in December.

The report follows cybersecurity reviews of ride-hailing service Didi and on two other companies by Chinese regulators shortly after shares of those companies began trading in the US. China has been clamping down on technology companies over a range of issues including security and privacy and potentially anti-competitive behavior.

ByteDance’s founder, Zhang Yiming, decided to indefinitely shelve the IPO plans after meeting with cyberspace and securities regulators about focusing on risks related to data security and other items, WSJ reported.

Beijing has concerns that data collected by tech companies in the country could be compromised through disclosures linked to U.S. listings. Chinese authorities, meanwhile, are considering a rule change that would allow them to stop domestic firms from listing publicly in overseas markets, according to a Bloomberg report last week. The loophole has previously been used by Chinese tech giants like Alibaba and Tencent to launch IPO in the US.

Didi on Monday warned of a likely hit to its revenue after a regulator ordered the removal of 25 apps from online stores, Reuters reported. The Cyberspace Administration of China last week said Didi was in violation of data-gathering rules. Didi’s stock began trading on the New York Stock Exchange on June 30 and the cybersecurity review was announced two days later. The shares have lost roughly 20% since then and were pressure during Monday’s session.

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Didi’s US shares plunge 25% after China cracks down on ride-hailing app, just days after $68 billion IPO

Didi Chuxing China ride-hailing app
Didi is China’s biggest ride-hailing app.

Chinese ride-hailing app Didi dropped as much as 25% on the US stock market on Tuesday after China cracked down on the company, only days after its blockbuster initial public offering in New York.

Didi’s US-listed shares were last down 21.98% by 9.50 a.m. ET, to $12.10. US stock markets reopened on Tuesday after Monday’s 4th of July holiday.

Chinese authorities on Sunday ordered app stores to remove Didi Chuxing, the country’s biggest ride-hailing company, from their platforms. The Cyberspace Administration of China cited serious violations in the collection and use of personal data.

The crackdown came less than a week after Didi’s shares started trading on the New York Stock Exchange in one of the biggest IPOs of the last 10 years. Didi hit the market on Wednesday, with shares closing at $14.14, giving the app a market capitalization of $68 billion.

The company said China’s move to lock out new users may have an adverse impact on its revenue in its home market.

Uber, which is the second-biggest US holder of Didi stock, fell 1.82% when markets opened.

Read more: POWER PLAYERS: These 9 Uber executives are fighting the company’s increasingly messy gig-economy policy battles

Shares of Full Truck Alliance and Kanzhun, two Chinese tech companies who also recently listed in the US, dropped 19.95% and 9.38% respectively. The declines came after China expanded its clampdown to put new restrictions on the two companies on Monday.

“China is cracking down on big tech, but the decision to remove [Didi’s] app from domestic platforms appears to be timed for maximum impact and embarrassment,” said Neil Wilson, chief market analyst at trading platform Markets.com.

“China’s Communist Party is bristling at the number of Chinese companies listing in the US this year, but there is a genuine concern at the heart of this – regulators are not impressed at the way Didi and other Chinese tech companies handle data.”

Axel Springer, Insider Inc.’s parent company, is an investor in Uber.

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Didi plunges 30% in premarket trading after China cracks down on ride-hailing app, days after $68 billion US IPO

FILE PHOTO: The company logo of ride hailing company Didi Chuxing is seen on a car door at the IEEV New Energy Vehicles Exhibition in Beijing, China October 18, 2018.  REUTERS/Thomas Peter/File Photo
Didi Chuxing is China’s biggest ride-hailing app.

  • Didi shares plunged as much as 30% in premarket trading Tuesday after China cracked down on its app.
  • Didi Chuxing listed on the New York Stock Exchange on Wednesday in a $68 billion IPO.
  • Chinese authorities are taking a tough line with the ride-hailing app maker and other tech companies.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Shares of Chinese ride-hailing app maker Didi plunged as much as 30% in premarket trading on the US stock market on Tuesday, after China cracked down on the company only days after its blockbuster US initial public offering.

Didi’s American depository receipts then pared some of their losses to stand 20.99% lower at $12.27 as of 06.15 a.m. ET. US equity markets will reopen on Tuesday after Monday’s 4th of July holiday.

Chinese authorities on Sunday ordered app stores to remove apps from Didi Chuxing, the country’s biggest ride-hailing company, from their platforms. The Cyberspace Administration of China cited serious violations in the collection and use of personal data.

The crackdown came less than a week after Didi’s shares started trading on the New York Stock Exchange in one of the biggest IPOs of the last 10 years. Didi hit the market on Wednesday, with shares closing at $14.14, giving the app a market capitalization of $68 billion.

Uber, which is the second-biggest US holder of Didi stock, fell 1.37% in premarket trading.

Read more: POWER PLAYERS: These 9 Uber executives are fighting the company’s increasingly messy gig-economy policy battles

Shares of Full Truck Alliance and Kanzhun, two Chinese tech companies who also recently listed in the US, dropped 16.04% and 10.49% respectively in premarket trading. The declines came after China expanded its clampdown to put new restrictions on the two companies on Monday.

“China is cracking down on big tech, but the decision to remove [Didi’s] app from domestic platforms appears to be timed for maximum impact and embarrassment,” said Neil Wilson, chief market analyst at trading platform Markets.com.

“China’s Communist Party is bristling at the number of Chinese companies listing in the US this year, but there is a genuine concern at the heart of this – regulators are not impressed at the way Didi and other Chinese tech companies handle data.”

Axel Springer, Insider Inc.’s parent company, is an investor in Uber.

Read the original article on Business Insider