Baidu and Net Ease Removed from Nasdaq-100 Index

On December 12, Nasdaq announced the results of its annual restructuring of the Nasdaq-100 Index, which will see seven companies, including Baidu and NetEase, removed from the index on December 19.

China Concept Stocks listed in the U.S. in the past year fell severely. The announcement of the HFCAA, or Holding Foreign Companies Accountable Act, triggered a collective plunge of China Concept Stocks in the U.S., with Baidu closing down 10%. Within this year, with Baidu down 21% and NetEase down 31% overall.

The Nasdaq-100 Index was established on January 31,1985 and is a stock market index composed of 100 large local and international non-financial listed companies on the Nasdaq. It is an indicator to the market condition of Nasdaq as a whole, as well as trend of the American high-tech industry. It has become one of the three major indices of U.S. stocks.

Being a member of the Nasdaq-100 Index is an affirmation from the market to the company which enhance its popularity, so as the trading liquidity of its stock. Nasdaq would restructure the Nasdaq-100 Index each December to remove companies that no longer qualify.

In December, the U.S. Senate passed the Holding Foreign Companies Accountable Act (HFCAA), which prohibits a company from continuing to trade in the U.S. if it does not allow The Public Company Accounting Oversight Board to inspect the company’s audit for three consecutive years. The HFCAA also requires public companies to disclose whether they are owned or controlled by a foreign government. In face of this, the doomed future of two CCP-controlled tech companies, Baidu and NetEase, is inevitable.