Didi shares fell nearly 9% in pre-market trading on Friday morning after the company’s base in China released its cybersecurity review.
According to the English translation of the Chinese announcement, new users will not be able to register for Diddy’s Ride Hailing service during a country’s cybersecurity review.
The Chinese move will take place just two days after Diddy’s IPO on the New York Stock Exchange. After closing nearly 16% on Thursday, stocks were ready to rise another day. Diddy’s stock rose about 5% in pre-market trading before China announced the announcement.
Diddy’s representative was unable to comment immediately.
The Chinese announcement also reflects the broader trend of the company’s crackdown on China-based tech companies, which was once loosely regulated. In June, Reuters reported that Chinese regulators were investigating Diddy for antitrust violations. It is also reported to be investigating the company’s pricing mechanism.
And last fall, after Chinese regulators intervened and interviewed the company’s executives, including Chairman Jack Ma, Ant Group’s IPOs in Shanghai and Hong Kong were postponed. Regulators fined Alibaba $ 2.8 billion in April, saying the company abused its market advantage.
Diddy warned in an IPO prospectus that he had met with regulators earlier this year, along with several other Chinese internet companies. The dispatcher said it could be subject to penalties because regulators may not be satisfied…