Weibo Corp (NASDAQ: WB), the Chinese version of Twitter, has acquired more than 570 million users per month since its launch in 2009, making China the most prominent social media market with more than 900 million users.
The trade tensions between Beijing and Washington heightened during the Trump administration. While President Biden’s administration has shown small changes, the Chinese companies whose shares are listed in the U.S. are now caught between the ongoing spat of the two largest economies. With its technology industry coming under scrutiny, Beijing has added its oversight on China’s most prominent businesses.
China asks Didi Global Inc (NYSE: DIDI) to relish from the U.S stock market
Didi Global Inc (NYSE: DIDI) released a statement on its decision to be delisted from the New York stock exchange and pursue Hong Kong’s listing barely five months after its debut.
This decision is probably a result of the crackdown by Chinese regulations on firm issues such as Cyber Security, as China aims to safeguard national security by tightening its internet control. However, the company’s delisting indicates that it has given in to China’s demands and bowed to its government’s pressures.
The company ignored the Chinese regulators’ to put the move on hold and raised $ 4.4 Billion for the IPO. However, the stock lost its value after China’s cyberspace administration ordered the removal of its application (Didi Chuxing) from the App’s stores, wiping out billions of Dollars of Didi’s valuation.
Consequences of Didi delisting
Didi’s move will likely discourage Chinese firms’ listings in the United States and make some reconsider their status as the public U.S. trading companies.
Megatrust Investments (H.K.) chief executive officer, Wang Qi, highlighted ADR regulatory challenges from Chinese and U.S. authorities. He added that the delisting would only make things easier as pleasing both sides is like walking on eggshells.
The news also extended the Softbank group’s six-day slump by another 9% in Tokyo on Monday. Masayoshi Son, the founder of Softbank, previously addressed investor concerns about its dependence on Chinese technology firms and noted that the group was investing less in China and was waiting for clarity on the regulatory situation.
