Baidu Stock Slumps As US Audit Risk Offsets Q2 Earnings Beat

Updated at 11:01 am EST

Baidu (BIDU) shares slumped lower Tuesday after the China-based tech giant posted a smaller-than-expected decline in second quarter revenues as cloud sales offset persist weakness in advertising.

After a solid bounce in pre-market trading, the stock was pressured by a report from Reuters that suggested Baidu’s China-based rival, Alibaba Group Holding (BABA) as well as other US-listed firms have been selected for audit inspections by the Public Company Accounting Oversight Board.

The move would follow an agreement reached last week between Washington and Beijing that would give US watchdogs access to more information tied to China-based stocks that are listed on American exchanges.

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