Almost eight years ago, Alibaba founder Jack Ma watched as eight of his customers rang the opening bell at the New York Stock Exchange, marking the first trading day for the Chinese e-commerce company. Alibaba had just completed the world’s largest IPO at the time, raising $25 billion at $68 a share. One trader told Fortune at the time that he’d “never seen anything” like the hype that marked Alibaba’s trading debut. Ma was mobbed by reporters as he wandered the trading floor. Some traders even reportedly wore hoodies in Alibaba’s trademark orange, rather than their traditional suit and tie. Shares surged 38% on the first day of trading.
But Alibaba’s run on the U.S. stock exchange could soon come to an undignified end. On Friday, the U.S. Securities and Exchange Commission added Alibaba to its provisional list of companies that would be delisted from U.S. exchanges under the 2020 Holding Foreign Companies Accountable Act (HFCAA), meant to force U.S.-listed Chinese firms to open their books to U.S. inspectors.
The SEC has threatened to boot Chinese firms from U.S. exchanges for years, and it’s even named other prominent firms—JD.com, video game publisher NetEase, agricultural platform Pinduoduo, EV maker NIO, and food retailer Yum China—among the 160 companies it’s identified as violating the HFCAA. But Alibaba’s notoriety, Ma’s flamboyance, and the firm’s special place in Wall Street history make the Chinese internet giant the new face of the $1.3 trillion delisting saga and put the looming crisis front and center in a way it hasn’t been before.
A fight over (auditing) access
The SEC’s threat to delist Alibaba is a new chapter in a years-long dispute between U.S. and Chinese regulators over how to audit Chinese companies listed in the U.S. The fight over auditing requirements puts all 261 U.S.-listed Chinese companies, with a combined $1.3 trillion in market capitalization, at risk of being forced to leave U.S….
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