Alibaba Among Chinese Stocks Under Ban Consideration

Several U.S.-listed Chinese stocks are in limbo as the mixed messages continue to flow from officials.

This week has been a wild ride for five stocks in particular. Initially, three companies were the target of a November executive order.

President Trump banned U.S. investors from buying or selling the following companies if certain conditions were not met:

China Mobile Limited (NYSE: CHL)
China Telecom Corporation Limited (NYSE: CHA)
China Unicom (Hong Kong) Limited (NYSE: CHU)

The New York Stock Exchange planned to delist all three this week.

But on Tuesday, January 5, the NYSE reversed course and announced it would not take any immediate action. All three stocks rose sharply on the news.

Then on Wednesday, January 6, the NYSE reversed course again and announced it would be delisting the three stocks this week. All three stocks have fallen since that news broke.

Now, according to reporting from the Wall Street Journal, government officials with the State Department, Department of Defense, and Treasury Department are considering adding Alibaba Group Holding Limited (NYSE: BABA) and Tencent Holdings Limited (OTC Pink: TCEHY) to the ban.

These are the largest Chinese companies by market cap.

BABA has dropped more than 5% on the day and TCEHY is down more than 4%.

If the bans go into effect, American investors who currently own stock in these companies will be given a limited window to sell, or be left holding the stock without any way to liquidate.

The ban on the first three is set to go into effect on Monday, January 11.

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