The stocks of nearly 200 companies that call China home are in the red on Tuesday, many because regulators in that country cracked down on a number of U.S.-listed Chinese stocks. Among the harshest hit include Full Truck Alliance (YMM 0.91%), which is down over 20% in morning trading; Kanzhun (BZ 4.41%) and UP Fintech Holding (TIGR 7.46%), both of which are down 11%; and Bilibili (BILI 3.82%), off almost 7% today.
Many of the stocks bearing the brunt of the crackdown are recent U.S. IPOs, including Full Truck, Kanzhun, and DiDi Global (DIDI -1.86%), the parent company of Chinese ridesharing giant DiDi Chuxing, which is down 23% this morning after regulators booted its app off of all app stores in the country.
Ostensibly, regulators are concerned about security risks, sounding very similar to the complaints lodged against TikTok owner ByteDance last year by U.S. trade officials. But because many of the stocks just recently had their initial public offering, it might have more to do with rising trade tensions between the two countries.
Both Full Truck Alliance and Kanzhun are being investigated by regulators after listing their stocks in the U.S., while UP Fintech and Bilibili are simply collateral damage brought on by the downdraft.
It also might make other China-based companies planning on going public with a U.S. listing think twice before doing so. Investors might not be so quick to rush in anyway for fear of additional crackdowns on these tech stocks.