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It was just recently when Didi had announced that it had gone public through the New York Stock Exchange (NYSE). Didi is a famous and prominent ride-hailing company that is currently operating in China. It is known for offering the same kind of services Uber offers all over the world.
However, after being listed on the public index for two days, Didi came under the radar of the Chinese regulators. Therefore, the Cyberspace Administration of China announced that they were going to run an investigation on Didi’s cybersecurity.
The regulator announced that until the review was completed, Didi will not be able to let new users register on the application. This meant that the new users would not be able to benefit from the service.
On the other hand, the regulators have not confirmed how long the inquiry is going to take place. Didi management has also stated that they will be providing full support to the Cyberspace Administration in their cybersecurity review of the company.
Although they are not mentioning it the regulators revoking their rights of offering their application to new users is definitely hurting the company. Ever since the announcement from the Chinese regulator on Friday, July 2, 2021, the stock prices of the company have experienced a downfall.
The investors that have invested their savings and money into the ride-hailing company would be facing a loss at the moment. This is because as of now, the share prices for Didi have experienced an 8% drop since the day it went public.
When Didi went public on Wednesday, June 30, it had experienced 1% increase in its price until the afternoon, going up to $14.14. By the end of the same day, its price climbed above $18 per share. Didi also revealed that by the end of its first day of trading, its market valuation had reached $70 billion.
Despite having a promising start, Didi had its public listing badly affected by the announcement that the Chinese regulator has made.
It is to be kept in mind that Didi is not just a company with the potential to operate within the country. Didi has played a great role in showing Uber the exit door from China as it pushed Uber out of the mainland of China back in 2016.
Ever since its foundation, Didi has played a huge role in increasing its market valuation and business. The ride-hailing service had recently announced that it was planning to expand its services all over the world. Therefore, going public was one of the major steps that the company had planned on taking before expanding its business on the fields.
Unfortunately, the regulatory step taken by the Cyberspace Administration of China is going to have a long-lasting impact on the company’s international reputation.
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