Disaster for Didi: China considers stronger crackdown

Chinese ride-hailing giant Didi came under pressure again on Thursday amid a report that Beijing is considering harsh penalties from a massive fine to even a forced delisting after its IPO last month.

Shares of Didi fell more than 10%, bringing its month-to-date losses to 27%. Bloomberg News reported Chinese regulators are planning a slew of punishments against Didi, including a fine likely bigger than the record $2.8 billion that Alibaba paid earlier this year.

The penalties could also include suspension of certain operations, delisting or withdrawal of Didi’s U.S. shares, the report said, citing people familiar with the matter. Didi didn’t immediately respond to CNBC’s request for comment.

Didi shares have dropped about 25% since its market debut on June 30 when it started trading at $14 a share.

Last week, officials from seven Chinese government departments visited the ride-hailing giant’s offices to conduct a cybersecurity review. The ride-hailing giant was forced to stop signing up new users and its app was also removed from Chinese app stores.

The Cyberspace Administration of China alleged that Didi had illegally collected users’ data.

Beijing is stepping up its oversight on the flood of Chinese listings in the U.S., which are overwhelmingly tech companies. The State Council said in a recent statement that the rules of “the overseas listing system for domestic enterprises” will be updated, while it will also tighten restrictions on cross-border data flows and security.

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[dofufu]

Every time media mentions about DIDI, Jim Cramer pops up in my head cause he was the one who encouraged everyone to grab as many shares as possible on IPO day ...which a lot of people did..

[budfox]

A couple weeks ago when DIDI was $ 15, Cramer said “buy as many shares as you can”

[temimegraham]

I bought 100 shares of DIDI at the IPO price based on Cramer’s recommendation. I am not selling because I want to be reminded to never to it again for the rest of my life. It is to gain knowledge how to be an intelligent investor, so I will watch my DIDI investment go to zero. I will never buy a Chinese stock again as all these Chinese companies are government owned. Opportunity cost.

[jonaco]

Their quarterly earnings call will be a very interesting one

[curtiselam]

I'm glad I didn't invest in that.

[NomadicAstro]

Di Di did some pretty shady stuff while ignoring regulators and went ahead with raising money thru IPO. Cash grab Corp greed. Delist it.

[Richard.Cabeza]

I will NEVER own ANY chinese company stock. The entire chinese financial system is risky, why would ANYONE buy these companies? Stop blaming Cramer, blame yourselves.

[chemistryforu]

Jim Cramer is the worst…he recommended this and bought it and now it’s down a ton. He recommended TXMD few years back and now down big on that. The worst.

[amazingjlandscaping]

Bought 1000 shares 2 weeks ago, but then sold last week thank god. It will not be delisted, but I hope it drops to $5 as this will be a hell of a stock if we hold for a long time.

[prnewbie]

There's nothing murky about Didi's greedy management. Didi were warned not to go ahead with the IPO. Tencent and Alibaba also tried to dissuade didi's management. And suddenly it's the CCP's fault? How convenient.

[dyssus]

Smart investors will stay away from "red markets"

[ElliottM-ckwg]

Surely China can't delist a stock from an AMERICAN exchange? Surely only the NYSE can decide if its listed or not?

[OdinReaver]

I made the right choice exiting my position, saw the news early and made a small profit. Bagholders will continue to buy and hope for a sunny day.

[ERAPst]

I bought because Jim Cramer pumped it. Hahaha. Now I’m a bag holder. thanks Jim!

[dazhou]

Why there is no single western media mention about Adrian Perica, the CIA guy on Didi's board?

[amols]

Jim "buy it with both hands" Cramer.

[leafyeon]

gawd that's.... man u can hear from just the tone that this ain't good, my god....

[peterlee]

Too many people in USA got slaughtered DiDi stock some people bought it at 14 12. 11 10
Today some people bought it at $8 let see Monday up to $9 sell again

[ouronlyhome]

DIDI deserves every bit of this punishment ... It should be delisted from the US market ...

[CricketMode]

Didi has high interest buy put options