Vehicle-for-hire company Didi Global Inc. experienced a 7% decline on the New York Stock Exchange on Friday following a Chinese government decision to launch a cybersecurity review of the company. As a result, Didi, which only started trading publicly on Wednesday, fell to a value of $15.26 per share.
The probe, which came as a surprise to insiders, is the latest in a series of issues relating to Didi’s trustworthiness, with issues around the company ranging from antitrust to data security. The examination of Didi is part of a larger antitrust probe into the activities of Chinese internet firms at large, with major players such as Tencent Holdings Ltd. coming under the microscope as well.
With Didi losing as much as 11% of its market value at one point on Friday, Brock Silvers, chief investment officer at Hong Kong-based private equity firm Kaiyuan Capital, expressed his concerns on the matter: “This is deeply unfair to investors,” Silvers explained. “And as a crucial matter of market integrity, China’s regulators should cease allowing companies to list while under investigation.”
Didi, founded in 2012 by Cheng Wei, managed to prevent rivals such as Uber from penetrating the Chinese ride sharing market. Following its massive domestic success, Didi has also been working on its international expansion.
