Baidu considers delisting from Nasdaq to increase its valuation as pressure ramps up from Congress (BIDU)

FILE PHOTO: A man takes pictures at the 2018 Baidu World conference and exhibit in Beijing, China, November 1, 2018. REUTERS/Jason Lee

  • Baidu is exploring the possibility of delisting its stock from the Nasdaq exchange and moving to an exchange closer to China to boost its valuation, Reuters reported on Thursday.
  • The Chinese search engine giant believes its shares are undervalued, and would fetch a higher valuation if it was listed on a different exchange.
  • The move comes as tensions rise over Chinese investments listed on US exchanges, with a group of senators introducing legislation that would limit Chinese IPOs on US exchanges.
  • Earlier this year, Luckin Coffee, a Chinese coffee chain, committed fraud by inflating its revenues by more than $300 million, sending its shares in a tailspin.
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Baidu is exploring the possibility of delisting its stock from the Nasdaq exchange in order to boost its valuation and escape increasing pressure being put on Chinese companies by US lawmakers, Reuters reported on Thursday.

Sources told Reuters that Baidu executives believes it is undervalued on the Nasdaq exchange. Shares of Baidu are down more than 60% from its 2018 high.

The Chinese search engine giant is working with trusted advisers to evaluate how it could be done if the company were to move ahead with the idea, according to Reuters. Reuters’ sources added that the discussions are at an early stage and are subject to change.

The move would come as pressure mounts on Chinese listed companies. Most recently, Luckin Coffee, a Chinese coffee chain, was found to have committed fraud by inflating its revenue by more than $300 million. 

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Shares of Luckin Coffee are down 95% from its peak and fell as much as 45% on Wednesday after a month long trading halt was lifted on its stock.

On Wednesday, the US Senate overwhelmingly passed a bill that would restrict Chinese companies from listing their stock on US exchanges unless they followed standards for US audits and regulations. 

Baidu co-founder and CEO Robin Li told the China Daily on Thursday that the company is paying close attention to the tighter regulatory scrutiny being put on Chinese stocks listed on US exchanges.

“For a good company, there are many choices of destinations for listing, not limited to the US,” Li told the newspaper.

Baidu shares jumped as much as 2.8%, to $111.53, on Thursday.

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Source: businessinsider
Baidu considers delisting from Nasdaq to increase its valuation as pressure ramps up from Congress (BIDU)