Didi shares drop 3.3% premarket on report Chinese government considers serious penalties for US IPO

Shares of Chinese ride-sharing company Didi Global Inc. DIDI,
fell 3.3% in premarket trading Thursday, after Bloomberg reported: Chinese regulators are considering severe penalties for the company after its IPO in the US in June, citing people familiar with the matter. Didi raised $4.4 billion in the deal, which came despite pushback from China’s cyberspace administration. The decision to go through with the deal is seen as a challenge to Beijing’s authority, people told Bloomberg. Officials from that agency, the Ministry of Public Security, the Ministry of State Security, the Ministry of Natural Resources, along with tax, transportation and antitrust regulators, have launched an investigation into the company’s offices. The sanctions considered include a fine, suspension of some operations or the introduction of a state investor. But the company could also be forced to cut its US shares, though it’s unclear how that could happen. The Chinese government launched a crackdown on its major tech giants last year, forcing Alibaba BABA,
Founder Jack Ma’s Ant Group Co. to make what would have been the world’s largest IPO ever.