Didi slumps 11% after China launched a cybersecurity rating of the company, days after US IPO

• Didi shares fell as much as 11% on Friday after China’s internet regulator launched a cybersecurity assessment of the ride-hailing company.
• China’s Cyberspace Administration said the review was aimed at preventing national data security risks.
• The review comes two days after Didi’s shares traded on the New York Stock Exchange.
• See more stories on Insider’s company page.

Didi shares plummeted Friday after the Chinese government announced a cybersecurity assessment of the rit-sharing service, marking that regulatory blow two days after the company made its trade debut in the US.

China’s Cyberspace Administration, the country’s internet regulator, said it has prevented Didi from registering new users as it conducts its assessment, according to multiple reports Friday. The regulator said it launched the move in an effort to prevent national data security risks, maintain national security and protect the public interest, according to a translation of the notification.

Didi’s NYSE-listed shares fell a whopping 11% to $14.60, before narrowing the loss to 6.5%. Didi on Wednesday marked the largest IPO for a Chinese company in the US market since 2014, when shares of an e-commerce company Alibaba began trading on the New York Stock Exchange. Didi shares skyrocketed as much as 28% on their first trading dayg, valuing the company at $86 billion.

Chinese regulators recently flexed their muscles against fintech firm Ant Group, which had been working to go public in the US later this year. Late last year, regulators suddenly unveiled new rules for online lending, which dealt a blow to Ant’s lending and lending business. The move came a week after Ant founder Jack Ma made comments publicly disapproving of China’s banking rules. The IPO, which had an estimated value of nearly $300 billion, was suspended.

Didi in a statement Friday, according to the South China Morning Post newspaper, said it plans to conduct a comprehensive cybersecurity risk survey and work to improve its cybersecurity systems and technology capabilities.

“Didi will fully cooperate with the relevant government agency during the assessment,” the statement said.

Didi shares traded at 11:41 a.m. ET Friday at $15.33, down 6.49%.