Didi Stock Climbs 50% On Report China's Inquiry Is Ending

The regulatory obstacles for Didi in China may soon be water under the bridge.

The Wall Street Journal disclosed on Monday, citing unnamed sources, that Beijing was close to concluding its cybersecurity probe of the ride-hailing behemoth.

The action would permit Didi to return to app stores in mainland China as early as this week.

The claim, which comes nearly a year after the company was originally targeted by regulators and its app was blocked in China, pushed the company's New York shares 53 percent higher in premarket trade on Monday.

According to the Journal, two additional U.S.-listed Chinese companies - logistics company Full Truck Alliance (YMM) and online employment platform Kanzhun (BZ) - are also nearing the end of their respective data security investigations and will have access to app stores reinstated.

Monday's premarket trading saw a 27 percent and 21 percent increase in the shares of these companies, respectively. Didi, Full Truck Alliance, and Kanzhun did not reply to a request for clarification immediately.

The outcome of the cybersecurity study arrives too late to prevent Didi's humiliating delisting from Wall Street less than a year after its initial public offering, and will have significant repercussions for the company.

Based on reports, all three companies are expected to be fined, with Didi facing the biggest penalty.

According to the report, they would also be required to transfer 1 percent of their equity to Chinese authorities, giving the government an official involvement in decision-making.

The announcement concludes an eventful year for what was once one of China's most prestigious and wealthy corporations.

Didi conducted a record-breaking IPO in the United States last June, raising $4.4 billion.

However, just days later, Chinese officials blocked the service from domestic app shops and launched the cybersecurity investigation. 

This inquiry made the company a symbol of Beijing's crackdown on technology companies and prevented it from enrolling new users.

Since then, about 90 percent of its market capitalization has vanished, plummeting from nearly $70 billion a year ago to under $9 billion currently.

Didi plans to list its shares in Hong Kong but has not divulged any specific timeframe.

The company said in December 2017 that it would exit the U.S. stock market without providing an explanation. 

It was widely viewed as an effort to pacify Chinese officials who were dissatisfied with how the news spread outside.