(Bloomberg) — Didi Global Inc. tumbled on Monday after the Financial Times reported that current and former employees of the firm have been banned from selling any of their stock indefinitely.
Shares of the Chinese ride-hailing giant fell 5.4% to close at $5.30 per share in New York trading. The move to block employees from unloading their shares comes just as early investors are able to sell stock on Monday with the end of Didi’s 180-day lock-up following its June initial public offering.
Read more: Didi’s Early Investors Get Window to Exit After IPO Disaster
While Didi’s outside investors — which include Uber Technologies Inc., SoftBank Group Corp. and Tencent Holdings Ltd. — will still be able to offload shares on Monday, according to the FT, they likely face steep losses after months of selling pressure.
A flurry of regulatory crackdowns by authorities in both Beijing and Washington have dogged the stock since its trading debut. Didi shares have dropped 62% in just short of six months of trading, erasing about $42 billion in market capitalization over that span. Earlier this month, Didi said it had begun preparations to delist from U.S. exchanges and pursue a listing in Hong Kong.
Read: China Imposes New Curbs on Offshore IPOs From Restricted Sectors
China’s National Development and Reform Commission and the Ministry of Commerce said in a statement Monday they will impose new restrictions on offshore IPOs from restricted sectors. It represents one of the biggest moves by Beijing to step up scrutiny of overseas listings in the wake of Didi’s IPO that proceeded despite concerns from regulators over data security.
The Nasdaq Golden Dragon China Index — which tracks China-exposed firms listed in the U.S. — fell 1.1% on Monday to take its losses for 2021 to more than 44%.
(Updates share price moves throughout.)
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