Hong Kong-listed shares of Chinese food delivery giant Meituan (OTC:MPNGY) plunged for a second straight session on Tuesday, down about 15% cumulatively.
What Happened: The stock, which is part of Cathie Wood-led Ark Invest's portfolio, plunged as much as 8.6% in early trading on Tuesday after a Chinese regulatory body criticized Meituan for its practices related to refunds and misleading content on its mobile app, Bloomberg reported.
The influential Shanghai Consumer Council has ordered the company to improve its content related to consumer rights and interests, fulfill delivery of orders and reach the consumers actively for solutions that cannot be delivered, according to the report.
Ark Invest has been snapping up shares in Meituan. The New York-based investment firm had last month said in its research note that it believes Meituan is challenging competitors such as JD Logistics and Alibaba's Cainiao in the last-mile autonomous delivery race.
Why It Matters: Meituan and peers including Alibaba Group Holding (NYSE:BABA) and Tencent Holding (OTC:TCEHY) have come under a growing Chinese regulatory spotlight amid concern that the country’s biggest tech firms have grown too powerful.
Price Action: Meituan OTC shares, which have plunged 12% so far this year, closed 10.9% lower at $32.84 on Monday.
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