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Trip.com ADR Plummets 17% as CN SAMR Launches Antitrust Investigation
Recommend 13 Positive 21 Negative 30 |
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The ADR of travel platform Trip.com (TCOM.US) plummeted 17.1% overnight (14th) to close at US$62.78. China's State Administration for Market Regulation (SAMR) announced yesterday afternoon that, based on preliminary investigations and in accordance with the Anti-Monopoly Law of the People's Republic of China, it launched an investigation into Trip.com for suspected abuse of market dominance and monopolistic behavior. Citi had earlier released a report stating that operators found violating any monopoly agreements or abusing market dominance will be ordered to cease such behaviors, have their illegal gains confiscated, and be fined 1-10% of their previous year's sales revenue, according to China's Anti-Monopoly Law. If Trip.com is found guilty, the potential fine could range from RMB490 million to RMB4.9 billion (based on estimates of its 2025 domestic and foreign business revenue). It remains to be seen whether this investigation will affect Trip.com's domestic profit margins or commission rates. The investigation may impact market sentiment before its conclusion. AASTOCKS Financial News Website: www.aastocks.com |
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