Didi Global Stock News and Forecast: DIDI spikes on end of Chinese data investigation
- DIDI stock is up more than 65% in Monday's premarket.
- The Chinese government announced the end of an investigation of its data practices.
- Didi Global shares IPO'd at $14 last summer and are slated to delist.
Didi Global (DIDI) stock spiked 66% in Monday's premarket to $3.07 after Chinese government regulators formally ended their investigation of its data practices. The government also ended similar reviews of Full Truck Alliance (YMM) and Kanzhun (BZ).
Didi Global Stock News: A fine is yet to be assessed
The Wall Street Journal says that Didi Global's ride-sharing app will be back in app stores as soon as this week. After debuting on June 30, 2021, at $14, the Chinese government decided to get back at the UBER of China for listing shares in the US. It came out that they had disapproved of the listing ahead of time and made it known to management. Didi's popular app was removed from Chinese app stores, and regulators began investigating its consumer data collection practices. Didi already agreed last month to delist its US shares, so that may have been the requirement to get its app back out to new users and end the investigation.
According to the Journal, Didi Global is expected to pay a rather large fine and transfer 1% of its shares to the Chinese government.
There remains little certainty over the price at which DIDI shares will be repurchased. The company said recently it will submit to Chinese authorities and delist its shares from US exchanges, but there was no color given over whether the company will repurchase them at the origianl IPO price or at the current share price, which was down 87% on Friday.
Shares of other Chinese heavyweights were aided by the news. Alibaba (BABA) rose 7% in the premarket, while Baidu (BIDU) jumped 4%.
Didi Global Stock Forecast: $3.55 is first target
Despite uncertainty over how much Didi will buy back shares from the public, the market likes what it heard this morning. Shares jumped not only past the 50-day moving average but also have found their footing above the 100-day. The 100-day now appears to be acting as support. Now resistance at the March 25 gap down level of $3.55 is the first target for bulls. Above there, $4.25 has shown itself to be strong resistance in the past.
DIDI daily chart
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Author
Clay Webster
FXStreet
Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.
