Baidu (NASDAQ:BIDU) said on Thursday that it was "actively exploring possible solutions" after the Securities and Exchange Commission added the Chinese internet giant to a list of companies that could be delisted from U.S. exchanges.
"Baidu will continue to comply with applicable laws and regulations in both China and the United States, and strive to maintain its listing status on both Nasdaq and the HKEx," the company said in a statement.
Baidu (BIDU) shares fell slightly more than 2% to $140.76 in premarket trading on Thursday. Year-to-date, shares have fallen slightly more than 3.5%, after Chinese government officials made comments in mid-March that soothed investors' concerns.
The company added it was notified by the SEC that it could possibly be delisted under the Holding Foreign Companies Accountable Act, or HFCAA, on March 30.
On March 23, Weibo (WB), which is akin to Twitter (TWTR), was also added to the list, joining biotech company Beigene (BGNE), Yum China (YUMC), Zai Lab (ZLAB), ACM Research (ACMR) and HUTCHMED (China) Ltd. (HCM), all of which were added on March 8, 2022.
The HFCAA states that a company would be delisted from a U.S. exchange if it was identified by the SEC for three consecutive years because of the Public Company Accounting Oversight Board's inability to audit it properly.
Chinese government officials recently told U.S.-listed Chinese tech firms, including Baidu (BIDU), to prepare for more audit disclosure from U.S. regulators.