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The DiDi logo.
AFP via Getty Images
DiDi Global’s
stock is shrugging off a report, denied by the ride-hailing company, that it could soon reshuffle its top team.
The Chinese equivalent of
Uber Technologies
(ticker: UBER) has come under increased regulatory scrutiny, as have many Chinese tech firms. “Didi is actively and fully cooperating with regulators’ cybersecurity probe, market rumours about management change at the company is not true,” it said in a Weibo post, according to a Reuters report.
Earlier, a report in the South China Morning Post said
DiDi
(DIDI) “may have to reshuffle its senior management team as a result of the ongoing cybersecurity investigations into its US$4.4 billion New York initial public offering.”
The report said the investigations are being conducted to “ascertain the persons responsible for DiDi’s decision to force its way to list in New York, contrary to the Chinese regulators’ verbal instructions—characterised by officials as a ‘deliberate act of deceit.’” The newspaper cited sources, which it didn’t identify, as saying this may result in President Jean Liu’s role being changed.
DiDi didn’t immediately respond to a request for comment.
China’s big technology companies have amassed confidential data that the authorities consider sensitive. Two days after DiDi listed its stock in New York on June 30, The Cyberspace Administration of China (CAC) said it had launched an investigation into the company to protect national security and the public interest, according to Reuters. The company said at the time it would cooperate fully.
Officials from seven government agencies raided the offices. The shares have fallen by as much as 43% since the $4.4 billion IPO. They are now down 26.6% over the past month, according to FactSet.
Still, the U.S.-listed shares are holding their ground despite the latest news. Did closed marginally lower on Thursday. That may be partly due to the belief Chief Executive Will Cheng, and Liu, will remain in place for now. Markets don’t like uncertainty, but the firm was quick to issue its reassuring Weibo post.
Investors appear to be sticking with the U.S. listed Chinese stocks despite the risks, reacting more to the steady flow of confirmed news than to speculation.
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