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Sunday, August 7, 2022

Weibo Has Been Facing Delisting Risks From The United States

Most of the regulators in the US have decided to enforce a law that would delist Chinese companies like Weibo– of which no accounting papers will be inspected. The addition of this Chinese social media platform to the delisting watchlist by the SEC could entail that several other Chinese internet giants like Baidu and Alibaba would not be very far from going through the same pressure. 

Weibo’s Delisting Could Affect Alibaba and Baidu

In 2020, the US administration under Donald Trump passed a bill that was specifically designed to tighten most of the accounting standards on several foreign companies. This law, which would seek visibility into the books of the US-listed foreign firms, did not really sit well with countries that were quite wary of delivering their data that would, naturally, compromise their national security. China was one of the countries that really did not cooperate fully with the Public Company Accounting Oversight Board of the SEC, which was instituted to audit most of the foreign firms that were trading stocks in the country- like Weibo

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But this reluctance seems to be fading, as, after the delisting of Weibo, the government of China told some of its tech darlings that were listed by the United States- Baidu, JD, and Alibaba, to bring out several more details, as reported by Reuters this week. It has been reported that the auditing documents will definitely not include sensitive data. 

Many of the tech outfits of China that have been listed by the United States like Weibo have already started pursuing secondary listings in Hong Kong amid a bunch of rising tensions between the giant powers in the world. Nevertheless, the latest gesture from Beijing does signal the willingness of the country to make several concessions to keep the companies investible in the markets of the United States. 

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