Didi pares losses after China cybersecurity review sends stock plummeting
REUTERS/Florence Lo/File Photo/File Photo
- Shares in Didi Chuxing closed 7% higher on Friday, paring steep losses over the course of the week.
- Chinese regulators on Friday moved to shutter dozens of apps run by Didi.
- Some members of Congress have blasted China's move, calling for an SEC investigation into whether US investors were misled.
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Shares in Didi Chuxing rose more than 7% on Friday days after a surprise probe by China's cybersecurity regulator sent the stock tumbling.
The stock closed at $12.03, up 7.3% on the day.
The company's US debut on June 30 saw shares peak as high as $18. But the weekend announcement from authorities that Didi had violated Chinese privacy laws crashed the stock as soon as markets opened. It bottomed out at $11 before regaining some lost ground.
But the bad news hasn't let up for Didi. Chinese regulators on Friday moved to shutter dozens of apps run by Didi, as well as cracking down on third-party websites giving access to its services. The company's main app had been removed over the weekend as the cybersecurity review was launched.
Some members of Congress have blasted China's Didi move, calling for an SEC investigation into whether American investors were misled. Didi raised $4.4 billion in its IPO.
"When did Didi know that it was exposed to regulatory risk? And even if Didi didn't know for certain at the time of the IPO that its app would be banned, why didn't it disclose that risk in its prospectus?" former SEC commissioner Joseph Grundfest told the Financial Times.