Didi stock jumps 50% after China investigation closes

This is according to Wall Street Journal, which said on Monday, citing unnamed sources, that the taxi giant’s Beijing cybersecurity audit was nearing completion. The move will allow Didi to return to app stores in mainland China, possibly as early as this week.
The report that comes almost a year after the company was hit by regulators for the first time and banned its app in China, its shares in New York rose 53% in premarket trading on Monday.
Didi (DIDI) is not the only company that is said to have come out of the woods. The other two Chinese firms registered in the US are logistics services provider Full Truck Alliance (GMM) and online recruitment platform Canjun (BJ) are also reaching the end of their respective data security tests, and according to the log, they will also have access to app stores restored.

Shares of these companies jumped 27% and 21% respectively in premarket trading on Monday. Didi, Full Truck Alliance and Kanzhun did not immediately respond to a request for comment.

The conclusion of the cybersecurity review came too late to save Didi from a shameful retreat from Wall Street just a year after it was listed, and will have further implications for the company.

Sources told the magazine that all three companies will be fined, with Didi facing the largest fine.

They are also expected to give the Chinese authorities a 1% stake, giving the government a formal decision-making role, the paper said.

End of chapter

The news ends a dramatic year for what was once one of China’s most famous and valuable companies.

Didi launched an initial public offering in the US last June, raising $4.4 billion.

But just days later, Chinese authorities banned the service from app stores in the country and launched a cybersecurity investigation. The investigation turned the company into the epitome of Beijing’s crackdown on tech firms and prevented it from registering new users.
Since then, nearly 90% of its market capitalization has been wiped out, falling from almost 70 billion dollars a year ago to about $9 billion now.

Last December, Didi said it would leave the US stock market without explanation. The move was widely seen as an attempt to appease Chinese officials who were unhappy with how it had become public knowledge abroad.

Shareholders last month voted continue withdrawing after the company said regulators would not be able to complete their investigation while it remains on Wall Street. The company plans to list its shares in Hong Kong, but has not yet specified deadlines.
Didi is also under scrutiny in the United States. Earlier this month, he revealed that the Securities and Exchange Commission was investigating the failed IPO.

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