Shares of Didi Global fell more than 10 percent in New York on Friday after China’s cyber space agency said it had launched an investigation into China’s riding giant to protect national security and public interests.
The Chinese Cyber-Space Administration (CAC) said on its website in an investigation released two days after Didi began trading on the New York Stock Exchange that Didi was not allowed to register new users.
Didi in Beijing told Acesparks that he planned to conduct a comprehensive examination of cybersecurity risks and would cooperate fully with the relevant government agency.
The document says that in addition to suspending the new registration in China, it is working normally.
China’s internet regulators have tightened rules for the country’s technology giants in recent years, asking companies to collect, store and process key data.
The cyber space agency did not elaborate on the investigation into Didi, but said the investigation was also based on China’s national security law and cybersecurity laws to prevent data security threats.
Offering a wide range of services in China and more than 15 international markets, Didi collects a huge amount of mobility data every day in real time. It uses some data for autonomous driving technologies and traffic analysis.
The two investors, however, told Acesparks that company executives had not discussed cybersecurity regulations with investors when they joined Didi’s IPO show.
Didi shares fell 10.9 percent after opening and EDT fell nearly 8 percent at 12:52 p.m.
“Didi seems to be putting a lot of regulatory pressure on it. The impact in the near future depends on how long the review lasts, but Didi has a large enough base that we don’t change our forecasts yet,” he told Acesparks. Kirk Boodri, an analyst at Redex Research, who publishes at Smartkarma for the news agency.
Adam Segal, a cybersecurity expert at the Council on Foreign Relations in New York, said it was difficult to know what would happen without details, but “CAC is considering the security of data from all major firms under pressure. Big technologies.”
Didi, who made $ 4.4 billion from his initial public offering, did not hold a ceremony to mark his first debut, an unusual move among Chinese companies.
Founded in 2012 by Vidi “Will” Cheng, Didi has faced several regulatory checks in China on its safety and performance license.
The company is also facing an anti-trust investigation by Acesparks in June as to whether Didi used anti-competitive behavior to oust its smaller rivals. At the time, he said he would not comment on “unfounded speculations arising from unknown sources (sources).”
Didi’s debut on Wednesday was the Chinese company’s biggest list in 2014 after Alibaba.
Didi had aimed to raise up to $ 10 billion through an IPO to value the company at $ 100 billion. However, investors were critical of the valuation objective during the meetings held before the start of the deal, which reduced its scope.
Didi is backed by technology investment giants such as SoftBank Group, Alibaba, Tencent and Uber.