PDD - Why Baidu Dingdong and Pinduoduo Stocks Crashed on Monday
Chinese President Xi Jinping secured an unprecedented third term as leader of the People's Republic on Sunday -- and U.S.-listed Chinese tech stocks promptly fell off a cliff as a result.
As of 11:05 a.m. ET, shares of internet search giant Baidu (NASDAQ: BIDU) are down 16.6%, while e-commerce platforms Dingdong (Cayman) Limited (NYSE: DDL) and Pinduoduo (NASDAQ: PDD) have fallen 18.9% and 28.8%, respectively.
What does a continuation -- not even a change -- in the leadership structure of the Chinese government have to do with the price of Chinese tech stocks, you ask? Well, basically, the thinking goes like this: If Xi was tough on Chinese tech stocks in the middle of his second term -- which according to tradition should have been his final term in office -- now that he's broken with tradition and taken a third term, there's really no reason to think he will need to moderate his views on the proper relationship between government and private enterprise going forward.
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Why Baidu, Dingdong, and Pinduoduo Stocks Crashed on Monday