Why Shares of KE Holdings Are Falling Today

Shares of the large Chinese real estate platform KE Holdings (NYSE: BEKE) took a breather this morning after a stunning run yesterday that sent the stock up more than 60%. The large run happened after Chinese regulators signaled support for Chinese stocks listed on U.S. exchanges. KE Holdings traded more than 18% lower as of 10:30 a.m. EST today.

Last week, the Securities and Exchange Commission named five Chinese stocks trading on U.S. exchanges that could be delisted for violating U.S. securities law. The issue for Chinese stocks is that U.S. regulators want to thoroughly review their financials as they do with domestic stocks.

However, the Chinese government essentially prohibits foreign accountants from reviewing the financials of Chinese firms. By law in the U.S., if regulators can't audit companies for three years in a row, then they can't trade on U.S. exchanges.

Source Fool.com