By Senad Karaahmetovic
Shares of Alibaba (NYSE:BABA) are up over 2% in premarket Monday after the company said it plans to comply with U.S. regulators and work to maintain its listings in New York and Hong Kong.
“Alibaba will continue to monitor market developments, comply with applicable laws and regulations and strive to maintain its listing status on both the NYSE and the Hong Kong Stock Exchange,” BABA said in a statement Monday.
The company has reassured investors about its own plans after the U.S. SEC added the stock to a group of companies that face a potential listing removal in the U.S.
Alibaba stock price fell 11% on Friday on this news and is down almost 4% in Hong Kong trading today.
However, Jefferies analysts say that there should be no change to the timing of delisting. Analysts continue to see mid-2024 as a potential delisting time for Chinese ADRs.
Jefferies believes the SEC simply reacted to Alibaba posting its recent annual report.
A BofA analyst, who cut the price target to $155 from $162 on BABA stock, added:
“Conversion of its secondary listing in Hong Kong to a primary status will mitigate liquidity risk. But related news could remain a source of stock volatility as some ADR investors such as retail ones who may not be able to own non-US stocks,” the analyst said in a client note.