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Rumors of Alibaba’s possible arrest of Jack Ma briefly removed $ 26 billion from market value

Jack Ma has been low since the end of 2020. For a brief moment on Tuesday, people thought he had reappeared – on the wrong side of the law.

  • A state media report says a person named Ma was investigated.
  • Jack Ma’s Alibaba’s share price plunged, but recovered losses after a correction of the report.
  • The wild turn showed how investors were still afraid of Beijing’s repression of the technology sector.
  • Visit Business Insider for more stories.

For a brief moment on Tuesday, people thought Jack Ma, the elusive founder of China’s e-commerce behemoth Alibaba, had reappeared – on the wrong side of the law.

Mom has pretty much stayed out of public view since Beijing shut down its companies in late 2020.

But Tuesday morning, Chinese state television company CCTV reported that the police in the city of Hangzhou, where the e-commerce giant Alibaba is located, had been investigating a person with the surname Ma since April 25.

Details of the brief 86-word report were lacking, but investors were still appalled. Many assumed that the person in question was Jack Ma, whose Chinese name is Ma Yun. Following the news, Alibaba’s share price in Hong Kong fell 9.4% in early trading, removing about $ 26 billion from market value, Bloomberg reported.

Another state media outlet, the Global Times, soon followed up with one report citing unnamed sources who said the person in question actually had three characters in his name. The person was born in 1985, making him two decades younger than Alibaba’s founder, according to the Global Times, and was identified as the director of hardware research and development at an IT company.

It seemed to ease investors’ fears somewhat. Alibaba’s shares Rose according to the Global Times report, closing the trading day in Hong Kong only 0.83% lower.

The wild swing in Alibaba’s stock price underscores how sensitive tech investors have become in terms of signs that Beijing is closing in on any of the tech giants.

In recent years, China has launched antitrust investigations against technology companies, increased data security oversightand limited consumers’ use of internet and gaming platforms. At the same time, China’s technology companies are struggling to get users and consumers to spend more in a cooling economy.

Alibaba has borne the brunt of Beijing’s repression. After Ma openly clashed with regulators in late 2020, Beijing responded by forcing Ant Group, Alibaba’s financial entity, to stop its listing in New York. Authorities also launched one investigation into Alibaba for allegedly abusing its leading market position.

In recent months, however, Beijing has signaled that it is easing its efforts. On Friday, the government said it would “promote the healthy development of the platform economy.” This led to an increase in stock prices on the Internet, Bloomberg reported.

Still, Alibaba’s share price failure on Tuesday showed investors still feeling shaken.

“China imposed quite a lot of draconian policies on technology companies, and now everyone is on alert – if anything happens, they dump the shares,” one analyst said. told Financial Times.

Rumors of Alibaba’s possible arrest of Jack Ma briefly removed $ 26 billion from market value

Source link Rumors of Alibaba’s possible arrest of Jack Ma briefly removed $ 26 billion from market value

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