Shares of Full Truck Alliance (NYSE: YMM) are tumbling today after several significant moves by the Chinese government against China-based companies.
Full Truck Alliance, which is a China-based tech company that offers a platform for trucking services, saw its stock fall as much as 13.5%. As of 11:35 a.m. EDT, it was down 8.2%.
There are two likely reasons why Full Truck Alliance's stock is slumping today. The first is that investors are reacting to recent comments by the Chinese government against the China-based ride-hailing company DiDi Global. Bloomberg reported last week that the government was considering "unprecedented" penalties against DiDi because it was unhappy with the company's recent decision to go public in the U.S.
Image source: Getty Images.
The Chinese government has begun to assert more control over technology companies based in the country, and some of its recent decisions include fining the e-commerce giant Alibaba $2.8 billion and threatening to fine, or even delist, DiDi Global.
These moves have led to many Chinese tech stocks falling and it appears that Full Truck Alliance's shares are feeling the pressure today.
Additionally, some investors are probably also concerned with the Chinese government's recent announcement that it will implement new restrictions on for-profit educational companies. The move is further proof that China's government is looking to expand its control over its companies.
With so much uncertainty for China-based publicly traded companies right now, it's no wonder why Full Truck and other Chinese stocks are sinking right now. Investors should tread lightly with these companies, as it's unclear what the government may decide in the coming months and how it will affect the businesses of major Chinese companies.
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