The NYSE-listed shares of Didi Global Inc (NYSE: DIDI) are down nearly 40% on Friday after the Chinese vehicle for hire company had to pause its plans of a Hong Kong listing.
Didi failed to meet CAC requirements
Bloomberg cited anonymous sources this morning as it reported the CAC (Cyberspace Administration of China) wasn’t convinced of the measures Didi had proposed to enhance security and prevent data leaks.
Not meeting the regulator’s guidelines for handling sensitive user data, the ride-hailing firm had to halt preparations for listing its shares on the Hong Kong Stock Exchange. Didi is yet to make an official comment on the development.
Didi has been in a freefall ever since it listed on the NYSE last June at $14 a share as it came under a cybersecurity investigation right after its IPO. The stock is now down 85% versus the IPO price.
Didi was removed from app stores in China
The CAC investigation resulted in removal of Didi apps from mobile app stores in China, leading to a significant hit to its top line. In its latest reported quarter, the company noted a 1.7% decline in revenue.
As Beijing moved to tighten regulations around U.S. listed Chinese companies, Didi said in December that it will delist from the NYSE and hold an IPO in Hong Kong instead – a switch that doesn’t seem to advancing swiftly for the ride-sharing company.
Earlier this week, Didi cancelled plans of suspending operations in Russia citing public pressure.
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