Didi soars 68% after report says China is set to end cybersecurity probe and allow new users on the ride-hailing app
Didishares surged nearly 70% on Monday after a report said China is ending an investigation into the company.
- China, which launched a security probe last year, will allow the ride-hailing app to add new users again.
Didi Global shares jumped by nearly 70% during Monday's session following a Wall Street Journal report that China is ending its cybersecurity investigation of the ride-hailing app, a move that signaled Beijing is continuing efforts to bolster economic growth.
Chinese regulators are wrapping up their yearlong probe into Didi and two other US-listed tech companies, Full Truck Alliance and online recruitment firm Kanzhun, the report said, citing unnamed sources. A ban on the companies adding new users will be lifted and authorities will allow Didi's mobile apps back on domestic app stores, perhaps as early as this week.
Didi surged as much as 68% to $3.10 in heavy volume before paring the gain to 37%. Full Truck Alliance charged higher by 10% and Kanzhun gained 23%.
The Journal said Chinese authorities are expected to deliver a conclusion of the investigation into the companies and are expected to face financial penalties.
The Cyberspace Administration of China, the country's internet regulator, in July 2021 announced an investigation into Didi and ordered its apps removed from domestic app stores, citing national data security risks. The move came days after Didi launched its IPO on New York Stock Exchange. Priced at $14, the stock soared as much as 28% on its first day of trading, valuing the company at $86 billion.
The regulatory turmoil surrounding Didi since led the company to move toward a delisting of its shares from the NYSE.
Beijing in late April suggested it would dial down its crackdown on the technology sector and pledged further stimulus measures as the country faces its slowest growth in three decades. The country has projected economic expansion of 5.5% this year, which would be the slowest pace of growth since 1991.
Last week, Shanghai began emerging from two months of lockdowns aimed at limiting the spread of COVID in the financial hub. Meanwhile, cases are reportedly rebounding in Hong Kong.
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