Didi shares fell as high as 22% on Tuesday in premarket trading, as fallout over the news about the company’s problems in China continued.
At 6:30 a.m. ET, the stock was trading at $12.40. ET, the stock traded at $12.40 as compared to Friday’s closing price of $15.53.
Tuesday marks the start of trading in the United States after Didi’s platform was banned by Chinese regulators. Monday was the Fourth of July holiday, and US markets were closed.
After determining that Didi Chuxing was a cybersecurity threat to customers and that it had “severely violated laws by illegally collecting personal information”, the Cyberspace Administration of China blocked the Didi Chuxing application from being downloaded on Sunday.
Investors were clearly shaken by the news. Didi just last week went public in what was the largest US initial public offering of a Chinese company since Alibaba’s 2014 debut. The deal raised $4.4 billion.
Two days later, China launched an investigation into Didi. It also suspended registrations for new users. On Friday, the stock price of the company also fell.
Didi, which relies heavily on its home market, and has 377,000,000 active users in China, has stated that it is following regulators’ requests and is working to make improvements to its app.
Although the company stated that drivers and customers who have already downloaded the app will not be affected, warned it could cause revenue loss in China.
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