Investing.com – Didi Global (NYSE:DIDI) ADRs were down by more than 4% in Monday’s premarket as the company warned its revenue would suffer as a result of the Cyberspace Administration of China’s order withdrawing 25 more of its apps from local app stores.
“The company expects that the app takedown may have an adverse impact on its revenue in China,” a company note said today.
The CAC ordered the apps’ withdrawal on Friday, alleging the apps illegally collect personal data.
The spate of listings by Chinese companies in the U.S. has raised the heckles of the authorities there, owing to the fact that big Internet-based companies possess vast amount of data on their users. Being listed in the U.S., they are required to disclose crucial data to the U.S. regulators.
The apps targeted in Friday’s crackdown include Didi’s app for drivers offering rides through its platform, an app for corporate users and a financing app. On July 4, the CAC had ordered mobile stores like Alipay and WeChat to remove Didi’s main app in China.
The country’s authorities took other steps too over the weekend that indicate a tougher life for the ride-hailing company in the coming days.
On Saturday, a cybersecurity review was proposed for companies with data on more than 1 million users before they seek to list in foreign countries, according to various reports.
China’s State Council plans a closer scrutiny of all offshore listings. The fallout of these moves has been immediate. Chinese companies have lost billions of dollars in market cap, leaving many American investors poorer. It has also forced other Chinese aspirants to look for other listing avenues.
According to another WSJ report, TikTok’s parent Bytedance has put on hold its plans for a public listing in the U.S. due to the tightened oversight.