Didi shares fell more than 10% in premarket trading Friday morning after China, where the company is based, announced a cybersecurity review of the co

Didi shares fall after China announces cybersecurity review just days after IPO

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2021-07-02 12:30:05

Didi shares fell more than 10% in premarket trading Friday morning after China, where the company is based, announced a cybersecurity review of the company.

According to an English translation of China's announcements, new users will not be able to register for Didi's ride hailing service during the country's cybersecurity review.

China's move comes just two days after Didi held its IPO on the New York Stock Exchange. The stock was poised to show another day of gains after closing up nearly 16% on Thursday. Shares of Didi were up about 5% in premarket trading before China released its announcement.

"We plan to conduct comprehensive examination of cybersecurity risks, and continuously improve on our cybersecurity systems and technology capacities," a spokesperson told CNBC in an email.

China's announcement also reflects a broader trend of the company's regulatory crackdown on technology companies based there that were once loosely regulated. In June, Reuters reported that Chinese regulators were probing Didi for antitrust violations. It's also reportedly looking into the company's pricing mechanism.

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