Should You Buy the Dip in DiDi Global?
StockNews
Published Jul 13, 2021 09:46AM ET
Updated Jul 13, 2021 10:30AM ET
Should You Buy the Dip in DiDi Global?
China-based DiDi Global’s (DIDI) shares have lost roughly 33% since the company’s impressive stock market debut on June 30 due to a crackdown by China's regulatory authorities. But can the stock rebound in the coming months on its market dominance in China’s ride-hailing service sector ? Read on for some insight.Headquartered in Beijing, China, mobility technology platform operator DiDi Global Inc. (DIDI) had an impressive stock market debut on June 30, 2021. However, the stock’s price has declined by roughly 33% since the listing, to close yesterday’s trading session at $11.16.
A recent report by the Cyberspace Administration of China (CAC) stated that the company violated several laws and regulations in relation to users’ personal information. The report was primarily responsible for the shares’ decline.
Furthermore, China's cyberspace regulators have been imposing tighter restrictions on data collection and data storage, and tightening rules for companies listed overseas or seeking to sell shares abroad, which is expected to continue affecting DIDI, among other China-based companies. In addition, the company has reported losses over the last three years. So, we think DIDI’s near-term prospects look uncertain.
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