- A state media report said that a person surnamed Ma was being investigated.
- Jack Ma’s Alibaba share price slumped but recouped losses after a correction was made to the report.
- The wild swing showed how investors still feared Beijing’s crackdown on the tech sector.
For a brief moment on Tuesday, people thought that Jack Ma, the elusive founder of China’s e-commerce giant Alibaba, had re-emerged, on the wrong side of the law.
Ma has remained largely out of the public eye since Beijing cracked down on his companies in late 2020.
But on Tuesday morning, Chinese state broadcaster CCTV reported that police in the city of Hangzhou, where e-commerce giant Alibaba is based, had been investigating a person surnamed Ma since April 25.
Details were missing from the terse 86-word report, but investors were spooked anyway. Many assumed that the person in question was Jack Ma, whose Chinese name is Ma Yun. After the news broke, Alibaba’s Hong Kong share price fell 9.4% in early trading, wiping about $26 billion off its market value, Bloomberg reported.
Another state media outlet, the Global Times, soon followed up with a report citing anonymous sources as saying the individual 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 a director of hardware research and development at an IT company.
That seemed to ease investors’ fears somewhat. Alibaba shares rose on the Global Times report and closed Hong Kong trading just 0.83% lower.
The sharp change in Alibaba’s share price underscores how sensitive tech investors have become to 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 oversight and restricted consumer use of the Internet and gaming platforms. At the same time, China’s tech companies are struggling to get users and consumers to spend more amid a cooling economy.
Alibaba has borne the brunt of Beijing’s crackdown. After Ma openly clashed with regulators in late 2020, Beijing responded by forcing Ant Group, Alibaba’s financial unit, to halt its IPO in New York. Authorities have also launched an investigation into Alibaba for allegedly abusing its leading market position.
However, Beijing has signaled in recent months that the crackdown is easing. On Friday, the government said it would “promote the healthy development of the platform economy.” That led to a spike in internet stock prices, Bloomberg reported.
However, the Alibaba share price fiasco on Tuesday showed that investors still feel shaky.
“China has imposed a lot of draconian policies on tech companies and now everyone is on alert, if something happens, they dump shares,” an analyst told the Financial Times.