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Alibaba shares plunge after unconfirmed rumors about Jack Ma

China’s national broadcaster CCTV on the morning of May 3 reported that police in the city of Hangzhou, where Alibaba Group’s headquarters are located, had taken “criminal coercive measures” against a person surnamed Code on 4/25. According to CCTV, the person surnamed Ma was arrested on charges of using the internet to engage in activities that threaten national security.

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Alibaba Group, founded by billionaire Jack Ma, has struggled because of investigations by Chinese authorities. Photo: Nikkei

Fearing that the person being arrested could be Jack Ma, the billionaire founder of Alibaba, investors have frantically sold off their shares, causing the price of the group’s shares on the Hong Kong exchange to drop by up to 9.4%. At the start of the day’s trading session, that equates to a loss of $26 billion in value, according to Bloomberg.

According to the Ministry of Public Security of China, Ma is the 13th most common surname in China. Out of 12 million people in Hangzhou alone, it is estimated that there are more than 100,000 people with the last name Ma.

However, the fact that Jack Ma’s unconfirmed rumors have sent shares of his conglomerate plunging suggests that investors are still wary of Alibaba’s future, even as Beijing signals it intends to lower the stakes. eased a two-year crackdown on the domestic technology sector, amid concerns about slowing growth in the mainland economy.

According to Fortune magazine, Alibaba shares are now down 66% in value from their peak in October 2020. Investors started selling shares of the group after Jack Ma, at a summit for the country’s most powerful financial regulators and bankers, criticized the planners. China’s policy of “stifling innovation and growth”.

Authorities responded by ordering the suspension of a $37 billion initial public offering (IPO) of Ant Group, an Alibaba-affiliated financial technology firm, also founded by Jack Ma. Regulators also launched an antitrust investigation into the e-commerce group, which resulted in a record fine of up to $2.8 billion for anti-competitive law violations last month. April 2021.

Even long-time Alibaba investors like Charlie Munger’s The Daily are slashing their Alibaba holdings.

Jack Ma, who stepped down as executive chairman of Alibaba in 2019, has been absent from the public since January this year, when he went on a charity trip to an elementary school on Hainan Island.

In April, China’s Central Commission for Discipline Inspection (CCDI), the country’s top anti-corruption agency, announced that it was directly investigating the influence of Jack Ma’s fintech empire, including transactions between Ant Group and banks and state-owned enterprises.

The CCDI also detained and later executed two party members against former Hangzhou Party Secretary Zhou Jiangyong for alleged corruption. Mr. Chu has faced charges of abusing his position and accepting “huge” bribes over the past 20 years. Some investigative evidence suggests that Mr. Chu used his influence to help businesses, including Ant Group.

Tuan Anh

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Jack Ma’s company is accused of being involved in a big corruption scandal in China

China’s state television accused billionaire Jack Ma’s Ant Group of being involved in a corruption scandal, as his internet empire lost billions of dollars because the authorities tightened management.

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