Didi is up almost 10% this week after reviews the Chinese language authorities took it over

Budrul Chukrut | LightRakete | Getty Images

Didi’s shares saw near double-digit gains this week amid a Bloomberg News report that Beijing is considering a plan to bring state control of the troubled ride-hailing giant by acquiring stakes through state-owned companies.

The state-run Beijing Tourism Group and other companies based in the city would invest in Didi as part of the early-stage proposal pending government approval, Bloomberg News reported, citing people familiar with the matter. The group could also take a so-called golden share with veto power and a board seat to gain control of Didi, the report said.

Didi, which went public on the New York Stock Exchange in late June, climbed 2.4% on Friday to hit 9.7% weekly. Still, since going public, the stock has lost almost half of its value under regulatory pressure.

Didi did not immediately respond to CNBC’s request for comment. It is unclear what effect government control would have on the ADR structure, which trades on the NYSE in lieu of ordinary share capital.

Didi is under cybersecurity clearance after the Cyberspace Administration of China alleged the company illegally collected user data. The ride-hailing giant was forced to stop registering new users and its app was also removed from the Chinese app stores.

Last week, the Wall Street Journal reported that Didi had delisting plans in mind, compensating investors for losses since the US IPO. Didi later denied the report.

Investors could also buy the dip lately after getting more clarity on Beijing’s actions. China’s cyberspace regulator earlier this week set two main conditions for companies looking to go public, including complying with national laws and regulations and ensuring the security of the national network.

The stock rose 10% last week.

The Securities and Exchange Commission is also stepping up its supervision of Chinese companies seeking listing on US stock exchanges. The agency said it will require additional disclosures about the company’s structure and any risks from future actions by the Chinese government.

– Click here to read the Bloomberg News story.

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