Please ensure Javascript is enabled for purposes of website accessibility

Chinese Search Giant Baidu Considers Delisting From the NASDAQ

By Danny Vena – Updated May 21, 2020 at 12:27PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The stock could be the first of many to leave in an ongoing rift between China and U.S. regulators.

Baidu (BIDU -0.20%), China's leading search provider, is considering delisting from the Nasdaq stock exchange amid rising tensions between U.S. securities regulators and China. The company has reportedly reached out to advisors to examine the consequences of such a move, including the potential for regulatory and funding issues, though a decision has not yet been made.

The company's chief executive and co-founder, Robin Li, said in a statement that Baidu was considering its options in the face of U.S. legislation that would place additional reporting requirements on foreign-owned businesses. "For a good company, there are many choices of destinations for listing, not limited to the U.S.," Li told the government-controlled China Daily newspaper.

The Baidu AI Lab in Silicon Valley.

Image source: Baidu.

The U.S. Senate passed a bill on Wednesday -- the Holding Foreign Companies Accountable Act -- that would require foreign companies to certify that "they are not owned or controlled by a foreign government." In addition, foreign entities would also be required to submit to audit oversight by the Public Company Accounting Oversight Board (PCAOB), which oversees U.S. companies. The Chinese government has historically refused to provide U.S. regulators with access to the audit results of companies in China, saying to do so would be a violation of its laws.

Baidu's stock has fallen more than 60% since its peak two years ago, due in part to a slowing economy in China and growing competition in the Chinese search market. The company was also hit hard by the trade war last year and more recently the outbreak of the COVID-19 coronavirus pandemic.

The company believes it's being held back on the Nasdaq Exchange as the result of ongoing tensions between Washington, D.C. and Beijing, and listing Baidu's stock on an exchange closer to home would boost its valuation.

Danny Vena owns shares of Baidu. The Motley Fool owns shares of and recommends Baidu. The Motley Fool recommends Nasdaq. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Baidu, Inc. Stock Quote
Baidu, Inc.
$117.49 (-0.20%) $0.23
Nasdaq, Inc. Stock Quote
Nasdaq, Inc.
$56.68 (-0.75%) $0.43

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/01/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.