China tech stock Meituan Crashed on Friday, 18th February 2022. The company’s share price tumbled as much as 32.80%, sending the share price from open price of HKD 217.40 to as low as HKD 182. Shares of Meituan closed at HKD 188.
Almost $26 billion of its market value was wiped out.
If You Never Heard of Meituan (HKG:3690)
Meituan (HKG:3690) operates an e-commerce platform. The company is a food delivery giant, offering food ordering and delivery service through its platform.
The revenue from food delivery are primarily derived from its platform service to merchants to display the food information and connect transacting users; food delivery service; and online marketing services in various advertising formats provided to merchants.
Why Did Meituan Crashed?
The reason Meituan share price crashed is because China asked delivery platforms to cut their fees charged to restaurants to reduce business costs. Since the primary business of Meituan is in food delivery, the company was not spared.
Summary of Meituan Crashed
Investors remained wary about China tech stocks since Beijing’s regulatory crackdown caused tech giants such as Alibaba to fall.
Any new regulatory measures or news announced by Beijing will surely send any China tech stock sinking. I am telling myself to avoid China tech stocks even though they performed really well last year.
Are you vested in any China tech stocks?