It’s not just China that’s turning up the heat. “But the overall calculus has clearly shifted in favor of prioritizing national security concerns.” “Financial officials previously tolerated their loss of regulatory control with overseas listings in order to provide firms with more opportunities to raise capital,” analysts at Eurasia Group wrote in a report earlier this month. It recently proposed that any company with data on more than one million users must seek the agency’s approval before listing its shares overseas. The watchdog, whose influence has ballooned since Xi set the agency up in 2014, is also setting its sights on curtailing overseas listings. The CAC, which has accused Didi of illegally collecting and using personal information, also joined several other government agencies, including ministries in charge of public and state security, in visiting the Beijing-based company to review its cybersecurity. The Cyberspace Administration of China - a powerful internet watchdog with Chinese Community Party links that trace all the way up to President Xi Jinping - banned Didi from app stores days after its initial public offering. And its efforts to control the sector spread even further this month. That means a company listing in the United States may find it easier to achieve a higher valuation and sell more sharesīeijing’s sweeping tech crackdown has rocked firms from Alibaba and Ant Group to Meituan and Pinduoduo.
Sources didi keep linkdoc free#
They can go to Hong Kong, for example, which also has a diverse pool of international investors and a regulatory regime that meets international standards and allows free flow of capital and information.īut the US market still has an irreplaceable role, as it’s bigger than any other financial market in the world, has a greater turnover in stocks and places a higher value on company earnings. There are still ways for Chinese companies to tap overseas investment even if the United States is no longer an option. 2021 was also shaping up to be a bumper year before Didi’s IPO. (BABA) went public in a $25 billion New York IPO, according to data provider Dealogic. Despite tensions between the two countries, Chinese firms still raised about $13.6 billion from US listings last year, the best annual total since 2014 when Alibaba US listings have long been an important way for Chinese companies to raise foreign capital. “Companies that have grown too big and global too quickly will be reined in to ensure that they are working together with the Chinese government’s priorities. “The Chinese government is sending a very clear signal to Chinese tech firms and to the rest of the world, that Chinese organizations must work in lock-step with the Chinese government,” Guthrie said. He added that a “serious pause” on such listings could be in effect until US-China relations improve. It “may very well be” the end - at least temporarily - to US listings for Chinese companies, according to Doug Guthrie, a professor and director of China Initiatives at Arizona State University’s Thunderbird School of Global Management. The company told CNN Business that it is “paying close attention to capital markets,” but has no specific plan for going public. More recently, Bloomberg reported that on-demand delivery app Lalamove is thinking about shifting plans for a $1 billion US IPO to Hong Kong as Chinese regulators clamp down on overseas listings. (ByteDance declined to comment on those reports, while the rest did not respond to requests for comment.) TikTok owner Bytedance, social e-commerce platform Xiaohongshu, fitness app Keep and medical data company LinkDoc Technology have all either shelved or scrapped plans to list in New York, according to reports by Bloomberg, the Wall Street Journal and the Financial Times. China’s unprecedented tech crackdown has wiped $1 trillion off the value of overseas-listed Chinese tech stocks since February - one of the worst sell-offs in history, Goldman Sachs analysts said in a research report last week.Īnd since shares in Didi crashed this month after its IPO in New York - a result of the massive scrutiny the ride-hailing company has faced from Chinese regulators and American lawmakers - a wave of other Chinese firms have reportedly backed off of plans to go public in the United States. The chill created by tensions, both within China’s borders and with its greatest rival, could bring overseas investment in Chinese tech to a grinding halt. Things are looking pretty dire for Chinese tech right now, especially firms that have been considering overseas listings as a way to raise money.
A botched public offering by one of China’s most prominent tech firms. A growing crackdown by Beijing that threatens to touch every part of the Chinese tech industry. Tough US laws requiring audits for foreign companies.
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