Baidu's NY and HK stock crashing as future in America remains uncertain

FXOpen

The well-worn term "Knowledge is power" is usually accurate under most circumstances, however when it comes to large internet companies, there appears to be an anomaly.

Baidu, which is the Chinese technology giant that specialises in Internet-related services and products and artificial intelligence, is widely regarded as a linchpin in China's information superhighway and a gateway to every aspect of everyday life for almost 1 billion people in the most commercially developed nation in the world.

In reality, Baidu is China's version of Google, and therefore central to the entire functionality of the People's Republic's business and personal requirements.

It also has entities outside China, and is listed on New York's NASDAQ exchange, and on the Hong Kong Exchange (HKEX).

When looking at the importance of China as a world economic superpower that the majority of industry across the globe is totally reliant on, and its own government-controlled internet system which has its own infrastructure with Baidu as a central resource behind the most sophisticated firewall on the internet, it would be a natural conclusion to draw that Baidu stock would be solid and invincible, just as that of America's big-tech 'FAANG' stocks.

This is not the case, however.

Over the last month, Baidu stock has been in a continual downward direction to the extent that its Hong Kong listing has gone down in value by a remarkable 6.16% in the past day, and over 12% in the past 30 days.

Baidu is now trading at 123.40 Hong Kong dollars on the Hong Kong Exchange.

Baidu's New York-listed stock has not fared much better, closing 2.18% down at the end of the New York trading session yesterday at $126.73 per share. That is also a 30-day low point.

This overall downward spiral has been evident for over two weeks now, as the company hangs under the uncertainty that the United States authorities may instruct NASDAQ to delist its stock.

At the end of March, the Securities and Exchange Commission (SEC) added Baidu, along with 4 other stocks of Chinese origin, to its 'delisting watch list'.

This caused Baidu's New York stock to fall by almost 2.6% on and its Hong Kong stock to drop by almost 3.5% on April 1, and confidence to wane overall.

It is currently understood that the SEC's potential approach to 'volatile' Chinese tech stocks came from Baidu's annual report filing at the end of 2021, which was filed with the US authorities, stating that "The Company (Baidu) understands the SEC made such identification pursuant to the Holding Foreign Companies Accountable Act and its implementation rules issued thereunder, and this indicates that the SEC determines that the Company used an auditor whose working paper cannot be inspected or investigated completely by the Public Company Accounting Oversight Board.”

There has been no action thus far, and the stock continues to be available on both the Hong Kong Exchange and NASDAQ, however confidence is continuing to drop and despite there having been no news relating to Baidu as a corporate entity over the weekend or yesterday, today's trading session represented a considerable drop for both listings.

It is almost impossible to estimate whether the US authorities will pursue a delisting, therefore it all hangs in the balance, but meanwhile, cautious sentiment is abound.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Financial Market News

US Government Shutdown: Assessing Economic Impact and Recession Risks Inflation Still Dogs the Economy: What Are the Central Banks Doing About It? Economic calendar: NASDAQ 100 May Keep Falling, High Volatility in Oil Markets, Potential Appreciation of the US Dollar Financial Markets Waking Up after a Turbulent Week: Important News Economic Calendar: RBA, BOJ, BOE, and Fed Meetings

Latest articles

Financial Market News

US Government Shutdown: Assessing Economic Impact and Recession Risks

The recurring spectre of a government shutdown has once again loomed over the United States, prompting concerns about its potential economic consequences. The shutdown may occur this weekend unless lawmakers agree on spending levels and whether to give more aid

Indices

S&P 500 Analysis: Price Reaches The Edge of Abyss

Investors in the US stock market have serious reasons to worry: → The likelihood of a shutdown of government agencies is becoming more and more real. It could happen as early as next week if a budget agreement is not reached

Cryptocurrencies

Bitcoin Cash Analysis: Promising Resistance Breakout

Yesterday, the head of the SEC regulator, Gary Gensler, answered questions for 4 hours before the Financial Services Committee of the US House of Representatives, which, among other things, related to cryptocurrencies. What has become known: → on the eve of

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 60% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.