Cutting through the noise around Chinese tech stocks
The country’s huge population may make investment there seem attractive, but significant risk exists in Chinese internet stocks, writes The Finance Ghost
DiDi is the ride-hailing app many had never heard of. After listing on the New York Stock Exchange and being given a glowing endorsement by the likes of US business news channel CNBC host Jim Cramer, the initial public offering (IPO) popped and the share price jumped more than 15% in the first couple of days. Things went badly wrong thereafter.As news broke that the Chinese regulators were clamping down on DiDi due to data privacy concerns, the share price tanked. Within days, it was more than 30% off the peak and nearly 20% off the IPO offering price of $14 a share.The Wall Street Journal reported that DiDi knew the regulators were unhappy. The company went ahead with the listing anyway. Perhaps in coming weeks it will become clear what the ramifications of this will be under securities law in the US. Being on the board of DiDi isn’t an enviable position right now.Of course, DiDi could’ve looked to the horror show of Ant Group’s last-minute-dot-com cancellation of its IPO for guida...
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