In July 2021, DIDI International, Inc. (OTCMKTS: DIDIY) was one of many many tech behemoths topic to the ire of the Chinese language authorities, which launched a knowledge safety probe into the corporate. This got here days after DiDi raised $4 billion from its IPO in New York. Regulators additionally pulled its app from Chinese language app shops after declaring it was “illegally gathering person information.”
On the time, DiDi was the most important mobility platform in China, with over 500 million annual lively customers and backing from Uber and SoftBank. Since then, it has began to lose market share to its rivals because it was unable to realize new customers via its app. The corporate was additionally prevented from itemizing its shares on the Hong Kong inventory change.
Chinese language regulator’s choice on DiDi
Regulators have imposed a effective of 8 billion yuan ($1.28 billion) on DiDi. This equates to roughly 4.7% of the corporate’s whole income final yr and a pair of billion yuan lower than what the corporate put aside for a possible effective. Regulators may even permit DiDi to return to the Chinese language app shops, which ought to assist it regain a few of the market share it misplaced in the course of the previous yr. Approval has additionally been granted to the corporate to proceed with its deliberate itemizing on the Hong Kong inventory change.
Traders are hopeful the effective will mark the tip of a troubled yr for DiDi and permit it to get again to enterprise as standard. The information sparked a 13.31% rise within the firm’s share value in after-hours buying and selling. Nonetheless, the tough restrictions positioned on the corporate precipitated its market capitalization to break down by 70% over the previous 12 months. The corporate gained approval from its shareholders in Might to delist from the New York Inventory Trade in December, because it appears to be like to modify to the Hong Kong change. The corporate nonetheless has a protracted strategy to go earlier than it’s again up and working correctly with fewer restrictions, however that is definitely a constructive first step for traders.
