Baidu Mulls Nasdaq Delisting Amid Growing U.S. Scrutiny of China Stocks

Chinese search engine giant Baidu may delist from the Nasdaq stock exchange after two years on the US exchange due to heightened scrutiny from US regulators.

The move was first reported by Reuters, which said Baidu had held discussions with an unnamed number of large shareholders.

Baidu is a high-profile example of China’s impact on global business, making it a target for US regulators over its dominance of the Chinese search engine market. The company operates in three jurisdictions: mainland China, Hong Kong and Taiwan.

The report cited a source with knowledge of the matter as saying the US Securities and Exchange Commission (SEC) had confirmed its disapproval of the company’s registration documents for NASDAQ listing. A similar situation occurred in September when HNA, the Chinese conglomerate that owned Intercontinental Exchange, attempted to deregister its shares from the NYSE.

The SEC did not respond to a request for comment. Baidu refused to comment for the report.

If the delisting occurs, Baidu would be the latest Chinese company to face a regulatory battle on US soil. Last year, Tencent was forced to abandon a $1.3bn share issue from the NYSE after the SEC raised concerns.

In the year to April, Chinese firms have sought at least $136bn through US share offerings, according to Dealogic. Chinese companies have struggled to find traction in the public markets after a volatile period in 2017. Chinese tech giant Tencent makes more than half of its revenue from revenue derived in the US, according to financial disclosure in 2016. With the move away from the US, Baidu will probably have to rely on a secondary stock listing.

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