DiDi Shares Explode 50% on Report China is Set to Remove Ban on New Users -Breaking
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© Reuters. On Report China Sets to Lift the Ban on New Users, DiDi shares explode 50%By Senad Karaahmetovic
China’s regulators are set to remove the ban on Didi Global (NYSE:) and two other tech companies listed in the U.S. which prevented them from adding new users, marking the end of the years-long investigation, according to the Wall Street Journal.
The regulators also will allow Didi, Full Truck Alliance and Kanzhun (NASDAQ) to return to their domestic app stores. This is almost one year since the apps were removed from stores by watchdogs after they began a data security investigation into the companies.
The late worries over a significant slowdown in China’s economy have urged the authorities to halt their clampdown on local tech companies and their data.
The IPOs of three Chinese companies raised $7 million total. The Chinese regulators began a probe of the companies shortly after they went public. Didi was particularly affected.
Within a matter of months, ride-hailing firm Uber saw its value plummet. The New York Stock Exchange delisted the company less than a full year following its initial debut.
The Chinese officials and the executives of Full Truck Alliance and Didi reportedly met last Wednesday to discuss the plans for completing the probes. They are likely to be fined, including Didi a substantial amount.
Reports state that three companies offer 1% equity stakes and will give the government direct involvement in business decisions.
Chen Da, HHSC Assets, believes that China’s tech crackdown could have reached its final stage after today’s news.
“The news comes like the crack of dawn for ADRs and tech stocks. The probe into Didi was an important incident last year, which started the downward spiral for Hong Kong tech shares and ADRs – – so a conclusion of this is necessary to end the troubles,” Da told Bloomberg.
DiDi shares rose 53% Monday morning after plummeting 89% over the past July.
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