Baidu Inc. (BIDU) - Get Free Report shares slipped lower Thursday following a report that the China-based tech giant could leave the Nasdaq amid a call for tighter listing requirements from U.S. lawmakers.
Reuters reported Thursday that the search engine and cloud computing company could move its listing 'closer to home', following comments from CEO Robin Li, who told the state-controlled China Daily newspaper that there are 'many choices' for a good company to list and that they're 'not limited' to the United States.
The suggestion followed a move by Senate lawmakers Wednesday to require non-U.S. companies listed on domestic exchanges to prove they are "they are not owned or controlled by a foreign government.” The Nasdaq has also said it will tighten IPO rules for international companies, although it did not single-out China-based companies while doing so.
“The Chinese Communist Party cheats, and the Holding Foreign Companies Accountable Act would stop them from cheating on U.S. stock exchanges,” Republican Senator John Kennedy of Louisiana, who is sponsoring the bill, said earlier this week. “We can’t let foreign threats to Americans’ retirement funds take root in our exchanges.”
Baidu shares were marked 0.75% lower in early trading Thursday to change hands at $107.75 each. U.S.-listed shares in Alibaba Holding Co. (BABA) - Get Free Report were marked 2.8% lower at $213.50 while JD.com (JD) - Get Free Report shares were seen 3% lower at $53.22 each.
The drive for increased accountability for China-based companies follows not only the increasing tensions between Washington and Beijing over the pair's reaction to the coronavirus outbreak but also the recent move to de-list Starbuck's (SBUX) - Get Free Report rival Luckin Coffee (LK) - Get Free Report, which has lost billions in market value since revealing a 'fake sales' scandal in early April.
Beijing-based Luckin listed on the Nasdaq in May of last year with a market value of $4.2 billion after pricing its IPO at $17 each. It raised another $1.1 billion in a secondary offering in early January and, at its peak, traded at just over $50 a share with a market value of $12 billion.
Earlier this month, the Beijing-based group said CEO Jenny Zhiya Qian, as well as chief operating officer Jian Liu were fired after its internal investigation "brought to the attention of the Board evidence that sheds more light on the fabricated transactions" the company detailed in early April.
Luckin shares closed Wednesday at $2.82 each, giving it a market value of just over $710 million.