Alibaba Shares Plummet, Facing Delisting Threat

While markets were generally higher on Friday, shares of China's Alibaba (NYSE:BABA) are having a rough day - down 9.5% at the time of writing.

At around 1:00 p.m., the SEC released an update to its Foreign Corporation Accountability Act list, identifying Alibaba as a company now facing delisting. The company will have until August 19, 2022 to submit evidence to challenge this designation. However, it is worth noting that shares were already trading sharply lower before the SEC news update. The early decline may have been in anticipation of the widely expected delisting notification. In addition, investors discussed the lack of new stimulus policies from China as a possible reason for the downside move. Moreover, possible new regulatory pressures were also cited as another reason for today's downward move.

Alibaba Added to the List of Companies That May Be Delisted

Alibaba Group Holding Ltd. is among Chinese companies that could be delisted, the U.S. Securities and Exchange Commission said on Friday. Alibaba's (NYSE:BABA) shares fell nearly 9% to $91.25. The Chinese e-commerce giant is among more than 270 Chinese companies listed in New York that have been identified as being at risk of delisting under the Foreign Companies Accountability Act (HFCAA) passed late last year. The rule gives Chinese companies until early 2024 to comply with oversight requirements, but the US Congress is considering bipartisan legislation that could accelerate the deadline to 2023. Alibaba has until August 19 to submit evidence disputing the identification, the SEC said. Other companies added to the list include Mogu (NYSE:MOGU) Inc, Boqii Holding Limited, Cheetah Mobile (NYSE:CMCM) Inc and Highway Holdings Limited.