Didi shares slide 3.3% premarket on report Chinese government mulling serious penalties for U.S. IPO
Shares of Chinese ride-sharing company Didi Global Inc. undefined fell 3.3% in premarket trade Thursday, after Bloomberg reported that Chinese regulators are considering serious penalties for the company after its U.S. initial public offering in June, citing people familiar with the matter. Didi raised $4.4 billion in the deal, which came despite pushback from China’s cyberspace administration. The decision to push ahead with the deal is being viewed as a challenge to Beijing’s authority, the people told Bloomberg. Officials from that agency, the Ministry of Public Security, the Ministry of State Security, the Ministry of Natural Resources, along with tax, transport and antitrust regulators, have launched an investigation at the company’s offices. The penalties under consideration include a fine, suspension of some operations or the introduction of a state-owned investor. But the company may also be forced to delist its U.S. shares, although it is unclear how that might happen. The Chinese government started a crackdown on its big tech giants last year, forcing Alibaba undefined Founder Jack Ma’s Ant Group Co. to pull what would have been the world’s biggest-ever IPO.