$Alibaba(BABA)$The topic of delisting had surfaced again. This time, a report that the PCAOB (SEC) refuted that an agreement with CSRC with regards to Audit is "Premature". So they can still act to delist ADRs if they cannot satisfy HFCAA standards 3 years in a row. (Yes, copied from Baseball).
For the 6 Chinese ADRs in the warning list, the deadline will be 2024. All 249 Chinese ADRs will be on that list after their Q4 Final report. This problem had been around for about 20 years.
To me, the risk Of delisting is about 10%. HFCAA came about during Trump's administration. A lot of it was due to Geopolitical tension of Tariffs. Of course, there was also Ruixing and Luckin Coffee which provided the ammo but the US have their Enron too.
Mr Liu He had already optimistically said that the CSRC is in constant communication and he is optimistic about arriving at a compromise soon. I'll take his word against any News Agencies's report anyday. We are all experienced investors.
The CSRC is not in an disadvantaged position at all. The US investors are already too deeply entrenched for 20 years in ADRs. Forcefully delisting 249 Chinese ADRs? You can imagine the implications in a capitalistic society And China's reactions. The US economy is already choppy, they don't need more on the plate.
The question of FACE. If push comes to shove, China owns $1.05 Trillion of US debts. Mr. Liu He is to be respected during the negotiations. Chinese saying, killing 1000 but sustaining 800 casualties.
So, in conclusion, a compromise is a win-win for all parties. The NYSE and SEC gets their reputation and the ADRs get their fundings. We, small investors get rich, of course.
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Looking fwd to those.
I'm keeping this as most of the naysayers are fr you know where😡
Ask "Is this a value Buy?"
Would you agree?