Didi stock plunged 42% on Friday after it reportedly halted plans to list its shares on Hong Kong's exchange.- The China-based ride hailing app failed to appease Beijing amid an ongoing cybersecurity probe.
- The drop in
Didi helped drag down otherChinese stocks like Alibaba and JD.com on Friday.
Shares of China-based ride hailing app Didi plunged as much as 42% to a record low on Friday following a Bloomberg report that the company is halting plans to list its shares in Hong Kong.
The move comes after Didi failed to appease Chinese regulators in an ongoing cybersecurity probe, as the country demands the company overhaul systems used to house sensitive user data, Bloomberg reported, citing people familiar with the matter.
The Friday downturn in Didi extended an ongoing decline in Chinese stocks, which were under pressure on Thursday after the SEC identified five Chinese companies that could be delisted if they don't allow US-based accountants to audit their financials. Alibaba and JD.com fell about 5% in Friday trades to new 52-week lows.
Didi went public on the New York Stock Exchange last summer in a move, angering Chinese regulators who had given last-minute warnings not to move ahead with the planned IPO.
The company has since announced plans to delist its stock from the New York Stock Exchange and relist in Hong Kong. It's also indicated potentially diverting user data collection to a third-party Chinese firm and selling a stake to a state-backed company. So far, none of those options have led to more friendly treatment from Chinese authorities.
The country removed Didi's main apps from local app stores last year, and they will remain suspended for the time being, according to the Bloomberg report. The move comes as China continues to crack down on big businesses, including Alibaba, financial payments company Ant Group, and video gaming company Tencent, among others.
Shares of Didi are down 89% from a record high of $18.01.