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DiDi Shares Drop Below IPO Price On China Crackdown

DiDi Shares Drop Below IPO Price On China Crackdown

Plus, oil rose to its highest level in six years after talks between OPEC+ were postponed indefinitely, AMC said it won’t seek shareholders’ approval to issue another 25 million shares, and Amazon’s Bezos officially stepped down as CEO.

Stocks were slightly higher at the open on Tuesday with the Dow trading just above the flatline before falling sharply lower. The S&P 500 and Nasdaq both added 0.1%.

DiDi shares are down nearly 23% today after regulators in China ordered the removal of the company’s platform from app stores just days after the company raised billions in the second-largest U.S. IPO for a Chinese firm. The Wall Street Journal said in a report on Monday that DiDi had been advised by Chinese regulators to postpone its U.S. listing and review its network security several weeks before it went public. And in a statement released Tuesday, China’s State Council said it is increasing supervision and revising rules for overseas listings of Chinese companies. “This is consistent with China’s broad strategy to encourage Chinese companies to list domestically on Hong Kong, Shanghai and Shenzhen exchanges,” said Dynamic Funds Vice President and Portfolio Manager, Benjamin Zhan.

Speaking of China… Bitcoin has been on a wild ride this morning after the country’s central bank and a regulator in Beijing took action against a company that was allegedly providing cryptocurrency-related services. The world’s largest crypto had risen as high as $35,106.83 before falling back to around $34,000 after the regulators ordered the company to cancel its business registration. “Whilst not directly affecting crypto, China clampdown on tech firms is another example of it flexing its regulatory muscles against an industry whose oversight has been lacking,” said Antoni Trenchev, co-founder of crypto lender Nexo. “Bitcoin too is caught in China’s regularity crossfire as it’s seen as a threat to the digital yuan.”

Oil rose to its highest level in six years after talks between OPEC and its oil-producing allies were postponed indefinitely, and the group failing to reach an agreement on production policy for August and beyond. West Texas Intermediate crude futures jumped as high as $76.98, a price last seen in November 2014, before the gains were erased to $75.13 per barrel. “With no increase in production, the forthcoming growth in demand should see global energy markets tighten up at an even faster pace than anticipated,” analysts at TD Securities wrote in a note to clients,” analysts at TD Securities said in a note. “This impasse will lead to a temporary and significantly larger-than-anticipated deficit, which should fuel even higher prices for the time being. The summer breakout in oil prices is set to gather steam at a fast clip.”

AMC Entertainment said it won’t seek shareholders’ approval to allow the movie theater chain to issue up to 25 million additional shares. CEO Adam Aron took to Twitter to announce the news, tweeting, “It’s no secret I think shareholders should authorize 25 million more AMC shares. But what YOU think is important to us. Many yes, many no. AMC does not want to proceed with such a split.” AMC proposed the share increase in a separate filing on June 3, seeking to capitalize on the Reddit-driven rally that has seen the stock rise more than 2,350% so far this year.

And Amazon shares are up more than 3% today after Jeff Bezos stepped down as CEO on Monday, handing the reins of the company over to Andy Jassy. Bezos will transition to the role of executive chair with plans to focus on new products and initiatives. Jassy, the former boss over Amazon’s cloud-computing business, served as Bezos’ “shadow” in the early 2000s, acting as a “brain double” for the Amazon founder and is said to resemble Bezos “more than any other” senior executive at the company, according to David Anderson, a former manager in Amazon’s AWS and device units. 

Stocks We’re Watching

Cerence Inc (NASDAQ: CRNC): Cerence announced today that it has broadened its Cerence Pay partner ecosystem with the addition of ryd pay, the largest cross-brand solution for mobile payments directly at the gas pump. “By adding ryd pay to our Cerence Pay ecosystem, we can make secure, voice-powered transactions available to more consumers and give our OEMs flexibility in how they integrate and offer payment options to best meet the needs of their drivers,” said Nils Lenke, VP & GM of Apps, Cerence. “With the car becoming more connected than ever before, it only makes sense to offer drivers contactless payment for services – whether that’s fueling up, getting a coffee or parking. We add a layer of convenience by letting drivers use their voice to initiate payments and ensure security by authenticating them at the same time through voice biometrics.”

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