Stock in newly public Didi Global (NYSE: DIDI) came crashing down Tuesday morning following a ban on its app by China amid continuing questions about the company’s business practices.

Didi stock was down more than 25% in premarket trading Tuesday before recovering slightly as the morning went on, although it was still off more than 23% in midmorning trading at $12.07 per share. The Chinese ride-hailing giant went public on Thursday at $14 per share, climbing as high as $18 per share on its opening day of trading.

On Sunday, China announced that it was banning the Didi app from its app stores as the country’s regulators continue to explore the company’s business. Didi has been caught up in a crackdown as China seeks to rein in tech companies citing national security concerns.

In Didi’s case, China said its app “has serious violations of laws and regulations in collecting and using personal information.” The country said current users of the Didi app could continue to utilize the service, but no new downloads of the app could take place. The ban is indefinite while the probe goes on.

Related:

Read: Is Didi’s IPO a stock loser from the start?

Read: China targets Full Truck Alliance in cybersecurity probe

On Monday, China’s Cyberspace Administration also announced probes into several other companies, including Full Truck Alliance (NYSE:YMM), a digital freight-matching platform that also went public in the U.S. less than two weeks ago.

Numerous law firms have announced investigations on behalf of investors.

In a Sunday statement, Didi said “it expects that the app takedown may have an adverse impact on its revenue in China.”

Didi Global operates in 16 countries, but 90% of its revenues come from China. In 2020, the ride-hailing giant saw its business plummet due to lockdowns related to COVID-19 and lost $1.6 billion on $21.6 billion in revenue, a 10% decline from 2019. In its initial public offering paperwork, Didi said it had 493 million active users in Q1 2021 and 15 million active drivers. In the SEC filing, Didi said it had 5.2 million bikes, 2 million electric bikes and 1 million-plus electric vehicles operating in China.

The cybersecurity probe is not the only probe Didi is facing in China. Reuters reported China regulators were investigating Didi for antitrust violations. According to the Reuters report, the country’s State Administration for Market Regulation is reviewing whether Didi has engaged in any practices that forced smaller rivals from the market and also whether its pricing mechanism is transparent enough.

In SEC filings, Didi said it had been asked to evaluate its business and correct any violations, but it warned that regulators may not be satisfied with the changes.

Even before the latest development, some investors were not convinced Didi was a stock worth investing in. David Trainer, founder and CEO of investment research firm New Constructs, writing in a Forbes opinion piece, said that Didi is a $34 billion company at best. It went public at a valuation of about $60 billion.

“Despite holding an estimated 90% of the ride-sharing market in China, Didi’s business model is just as unprofitable as Uber and Lyft,” he wrote.

Trainer noted that Uber and Lyft “have shown investors that ride-sharing is not a profitable business because of intense competition, low margins and a lack of differentiation between services.” In addition, he expressed concerns about what actions Chinese regulators may take and the fact that Didi is not profitable despite owning 90% of the Chinese market.

Click for more Modern Shipper articles by Brian Straight.

You may also like:

Social Auto Transport raises $1.5M in seed funding to expand gig economy auto-moving business

Bringg’s collaboration with Uber opens new doors for e-commerce

Walmart to begin drone delivery pilot this summer