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HONG KONG — China’s regulatory investigations of three tech companies shortly after listing in the US caught global investors off guard, showing the risks of holding stocks in fast-growing companies that have come under a microscope from Beijing.
On Tuesday morning, U.S. deposit receipts from newly listed company Didi Global Inc. fell 22% at the start of pre-market trading, after China’s cybersecurity regulator dealt a second blow to the ride-sharing giant two days after it launched a review of the security of its data on Friday.
A unit of the regulator also announced on Monday investigations into data security in popular mobile apps operated by Full Truck Alliance Co. and Kanzhun Ltd., whose ADRs fell 16% and 10%, respectively, in trading before marketing. US markets were closed Monday for the July 4th holiday.
The three companies had raised nearly $ 7 billion in total when they went public in the United States in June, and their shares rose when they started trading.
Didi’s Chinese rideshare app, Full Truck Alliance’s two trucking platforms, and Kanzhun’s online recruiting app have been ordered to stop adding users during exams. The Cyberspace Administration of China has asked app store operators to shut down Didi’s service in China and said the Beijing-based company collected personal information “in violation” of the country’s laws and regulations.
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