Chinese digital entertainment company Bilibili (NASDAQ:BILI) has rattled investors’ confidence due to worries about delisting from the U.S. Nasdaq exchange. However, a fresh report concerning the China Securities Regulatory Commission (CSRC) could put BILI stock on the fast track to higher prices.
As reported by Bloomberg, people familiar with the matter stated that the CSRC and other Beijing regulators are “preparing to give U.S. regulators full access to auditing reports of the majority of the 200-plus companies listed in New York as soon as mid-this year.”
This is significant for Bilibili, which has sometimes been referred to as the “YouTube of China.” As Louis Navellier and the InvestorPlace Research Staff explained, “The threat of the U.S. government delisting Chinese stocks hasn’t gone away.”
Some China-based companies like Bilibili have gone to the effort of obtaining a dual-primary listing in Hong Kong. That’s a sensible thing to do, no doubt. However, it hasn’t quelled some American investors’ concerns.
Now, we may have a conciliatory move in the near future from Beijing. Let’s not get ahead of ourselves, though. Details are still under discussion and may change, according to the people familiar with the matter. They also reported stated that any agreement would require a sign-off from the top leadership.
Still, this is exciting news for BILI stockholders. It’s encouraging that the Chinese government may be willing to divulge the aforementioned auditing reports to U.S. regulators. Could this represent a thawing of relations between the two nations’ governments?
Moreover, an exchange of audit info between Washington and Beijing could help to provide a greater degree of transparency. That’s a win-win for investors in both countries.
As you may recall, the Securities and Exchange Commission published a provisional list last month of businesses that could face removal/delisting. This caused consternation among U.S.-based investors of Chinese companies such as Bilibili.
Thankfully, there’s hope on the horizon now, as delisting might be averted for BILI stock in the U.S. So, investors can choose to hold onto their shares for the time being, and even consider that a relief rally may be in store.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
