China-based ride-hailing and tech company DiDi Global (NYSE:DIDI) is suffering major losses today. DIDI stock is down more than 40% as the company’s regulatory woes only continue to deepen. Today, the selloff is likely due to it delaying a planned Hong Kong stock listing.
What’s going on with DIDI stock today?
Well, DiDi’s decision to suspend its listing stems from regulatory concerns with the Cyberspace Administration of China (CAC). The agency informed company leadership that their proposed security and data leak measures aren’t up to standards, an anonymous source informed Bloomberg. DiDi had been gearing up for the Hong Kong listing — originally scheduled for the summer of 2022 — but this news adds an additional layer of uncertainty to the already struggling company.
If you recall, DiDi withdrew its apps from app stores last year as the CAC investigated its customer data practices. It fell under regulatory scrutiny in China just days after its initial public offering (IPO) in the U.S. last summer.
DIDI Stock Continues Its Downward Descent
Since going public for $14 per share last summer, DiDi Global has seen its share price dwindle more than 85%. Currently, DIDI stock is trading for under $2 per share after today’s massive drop. DiDi has endured a tumultuous history since going public, as China stepped in to crack down on the tech company.
In December, five months after its U.S. IPO, the company announced plans to withdraw from the New York Stock Exchange. Along with its departure, the company revealed intentions to go public on the Hong Kong exchange. This was a show of adherence to Chinese regulatory agencies, which were clearly displeased by its U.S. listing.
However, now the CAC’s recent judgement may present a barrier to even a Hong Kong listing. China has made a point of cracking down on a number of the country’s biggest companies, including Alibaba (NYSE:BABA) and Tencent (OTCMKTS:TCEHY), among others. Today’s news also follows a Thursday announcement that five Chinese companies listed on U.S. exchanges may have violated auditing policy.
China-based companies have been seemingly down across the board lately. Now, DiDi will likely see newfound attention as it struggles to overcome regulatory hurdles.
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n the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
