Shares of Chinese e-commerce giant Alibaba tumbled as much as 9% yesterday after the publication of a state media report that cited Chinese officials taking action against an individual surnamed Ma. This means, according to CNN, a loss of US$ 26 billion – the equivalent of R$ 130 billion.
The papers recovered after the report was updated to make it clear that the authorities were not targeting the company’s founder, Jack Ma.
State broadcaster CCTV initially reported that authorities in the city of Hangzhou, where Alibaba is based, had taken action against an individual surnamed Ma, suspected of using the internet to engage in activities that would have jeopardized national security.
The broadcaster later revised the report to make it clear that the individual in question had a three-character name, indicating that the authorities’ target was not the billionaire founder of Alibaba.
A spokesperson for Alibaba did not immediately respond to a Reuters request for comment.
Alibaba shares were down as much as 9.4% in early trading in Hong Kong. Later, the shares reduced most of the losses and closed down 1.76%.
“Saying that a guy with the surname Ma in Hangzhou helped an investigation set off panic, but when the clarification came it (helped) calm the market,” said Steven Leung, director of sales at brokerage UOB Kay Hian.
Chinese officials have previously taken action against Ma’s business empire after he made comments in Shanghai in October 2020. At the time, Ma accused China’s financial watchdogs of stifling innovation in the country.
Chinese regulators ended up suspending the listing of fintech Ant two days before its planned debut on November 5, 2020. The company would be valued at $37 billion in the IPO.
In addition, authorities ordered the company to be restructured and launched antitrust investigations into Ma’s business, leading to a record $2.75 billion fine for Alibaba in April last year.
Ma himself has kept a low-key public profile since the authorities’ crackdown on his business began.
