Didi's share plummets as China reportedly considering unprecedented penalties on it

July 22, 2021 10:18 pm

Shares of Didi fell more than 9% Thursday, following Bloomberg's report that Chinese regulators are planning a slew of punishments against Didi.

Details: Penalties for Didi may include fines that may be higher than the record $2.8 billion paid by Alibaba earlier this year. Suspension of certain operations, delisting or withdrawal of Didi’s US shares could also be considered in the penalties, Bloomberg reported, citing people familiar with the matter.

Since its listing on June 30, Didi's share price has fallen by more than 20% to $10.4 per share. Its IPO price was $14 per share.

Last week, seven government departments have jointly launched an on-site cybersecurity investigation into Didi. The ride-hailing giant was forced to stop signing up new users and its app was also removed from Chinese app stores.

Context: China is ramping up supervision of Chinese firms listed offshore. Beijing said it will improve regulation of cross-border data flows and security, crack down on illegal activity in the securities market and punish fraudulent securities issuance, market manipulation and insider trading.