Hail of a change in China
Gov’t ride ‘control’
China’s government is reportedly looking to take control of ride-hailing giant Didi, the latest development in a broader crackdown that has kept Chinese tech companies and investors on their toes for months.
Under plans being considered by China’s government, a subsidiary of Beijing’s city government could take a stake in Didi — the world’s largest ridehailing company — that includes a “golden share” with a board seat and veto power, Bloomberg reported on Friday.
Investors reacted positively to the report, sending Didi’s New York-traded shares up 7.5 percent to $9.54 early Friday. They closed at $9.02, up 2.38 percent from the previous day, according to MarketWatch data.
Didi’s shares are still down about 36 percent since the company went public in the US in June. Significant shareholders in the company include SoftBank and Uber.
Didi did not immediately reply to a request for comment from The Post.
The company — which has nearly 600 million users and bought out Uber’s unprofitable China operation in 2016 — is one of many Chinese tech firms to attract the wrath of government regulators this year.
Just two days after Didi’s $4.4 billion debut on the New York Stock Exchange, Chinese regulators first said they were investigating the company.
Days later, the country’s cybersecurity regulator accused the company of improperly using customer data and said it would remove the company’s apps from app stores, essentially destroying Didi’s ability to take on new customers.
China’s government has also turned its attention to many of the country’s other tech giants, including Alibaba and Tencent.
In late 2020, China suspended a planned $37 billion IPO by e-commerce giant and Alibaba affiliate Ant Group, shocking investors.
Shortly afterward, Chinese regulators said they were conducting an antitrust probe of the company, and Alibaba founder Jack Ma went into hiding for months.
On Thursday, Alibaba agreed to donate a whopping $15.5 billion to various charitable causes in support of Chinese President Xi Jinping’s push for “common prosperity.”
The sum represents more than a third of Alibaba’s $45.2 billion cash pile, according to Barron’s — and adds to a list of entanglements with Beijing that have sent Alibaba stock tanking nearly 40 percent over the past year.
Chinese video gaming companies like Tencent have also recently faced the scrutiny of the country’s regulators.
On Monday, the Chinese government told video game companies they would be required to ban minors from playing online games for more than three hours per week.