The company faced inspections over its data security and a broader Chinese crackdown on companies listing their shares abroad.
China’s State Council issued a sweeping warning to China’s biggest companies, vowing to tighten data security and overseas listings. That announcement followed the opening of a security review by China’s internet regulator last week and a demand for app stores to remove Didi.
Didi’s American depositary shares fell 20% to $12.49, wiping out about $15 billion of market value and taking the stock below the $14 price from its initial public offering. Beijing-based Didi controls almost the entire ride-hailing market in China and raised $4.4 billion last week in the second-largest U.S. IPO for a Chinese firm.
Chinese regulators asked Didi as early as three months ago to delay its landmark U.S. IPO because of national security concerns involving its massive trove of data. Before that, China’s antitrust watchdog ordered Didi to halt practices including arbitrary price hikes and unfair treatment of drivers.
While Didi’s half-billion existing users will still be able to order rides, for now, China’s cybersecurity crackdown adds to the uncertainty surrounding all the nation’s internet companies. Tencent Holdings Ltd., which has a stake in Didi, is down 2.7% this week, after sliding 3.6% Monday and partially trimming losses on Tuesday in Hong Kong. The onslaught of government announcements began on Friday after markets in Asia had closed.
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