Shares of TikTok rival Kuaishou tumble after state media demands tighter regulation

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Short video group Kuaishou has lost billions of dollars in market value after Chinese state media called for more regulation of the sector, in the latest warning to tech companies in the country amid regulatory aggression.

The comment published in Chinese Communist Party spokesperson People’s Daily on Friday accused online video platforms of negatively influencing the country’s youth, who flocked to stars boosted by short-run video platforms. by Kuaishou and his rival ByteDance.

Kuaishou shares fell 11.8% on morning trading in Hong Kong before slashing losses by 4.7% when the market closed. This came on top of a record 15.3% drop on Thursday after a freeze on its post-initial public offering of its shares expired and Kuaishou announced it would shut down its short, state-focused video app. -Unis who competed with TikTok from ByteDance.

Kuaishou’s shares, valued at $ 160 billion after its IPO in February, have been hit by Beijing’s crackdown on Chinese Big Tech groups. Its market capitalization has fallen from $ 65 billion since early July to less than $ 45 billion.

People’s Daily said algorithms in online platforms encouraged fans to send payments to support internet idols. “Some minors have been induced [to] participate in such fundraisers and have even been involved in illegal business, ”he wrote.

“By analyzing the emergence of this ‘bad fan culture’ phenomenon, we find that some online platforms have played a role in. . . fan the flames, ”the article added, without naming any company.

The scrutiny of China’s short video platforms came amid a growing assault on the country’s tech ecosystem, which has intensified in recent weeks as regulators have sought to exercise greater control. about the company’s operations and where they were selling stocks.

The party newspaper’s plank against “bad fan culture” also followed a surge of online support from fans for Kris Wu, a Canadian-Chinese singer who was arrested in Beijing on Saturday on suspicion of rape. Wu has denied the allegations.

“This extreme idol-hunting culture has repeatedly called into question the results of law and morals,” China’s Central Commission for Discipline Inspection, the party’s main anti-corruption, said in a statement on Thursday. published on its website. He added that online fan culture needs to be cleaned up by “drawing a red line” and “standardizing words and actions”.

CCDI noted that Chinese cyber regulators were developing a campaign targeting “fan club” culture and overseeing websites and platforms to “squeeze the space for fans to irrationally hunt idols.”

Much of the recent tech crackdown has focused on areas Beijing sees as having too much influence over Chinese youth. Authorities last month stunned investors by forcing companies that supervise students to reorganize on a non-profit basis, wiping out billions of dollars from the market value of the industry’s biggest players.