HONG KONG – China’s regulatory investigations into three tech companies shortly after their U.S. listings have taken global investors by surprise, showing the risks of owning shares in fast-growing businesses that have come under the Beijing microscope .
Within four days, a unit of China’s cybersecurity regulator said it released data security reviews on popular mobile apps operated by Didi Global Inc., Full Truck Alliance Co., and Kanzhun Ltd. All three raised close to $ 7. billion in total US Initial Public Offerings in June, and its shares rose on their commercial debuts.
Didi’s China transport app, Full Truck Alliance’s two truck transport platforms, and Kanzhun’s online recruiting app were ordered to stop adding users while reviews are being conducted. Didi, which went public on the New York Stock Exchange less than a week ago, suffered a second setback after the China Cyberspace Administration told app store operators to remove China’s service from the Beijing-based company.
On Tuesday, Didi shares fell 22% in early pre-market trading, while Full Truck Alliance fell 16% and Kanzhun shares fell 10%. US markets were closed on Monday for the July 4 holiday.
The latest regulatory assault is troublesome for the portfolio of Chinese companies seeking IPOs on US stock exchanges. Some may suspend their listing plans or go public in Hong Kong, investment bankers who advise Chinese companies said.
Source: WSJ
