The share price of Alibaba collapses (and then rises) due to an unfortunate case of assonance: in a few minutes the tech giant had lost 9.4% on the stock exchange in Hong Kong. $ 26 billion burned for a case of (almost) homonymy
Flash news of the CCTVBeijing state television: “Hangzhou police arrested an individual named Ma, accused of using an Internet company to harm national security.” Hangzhou is the city where Alibaba is based, its founder is the famous Jack Ma, from 2020 it smells of excommunication. The news in two sentences given on TV yesterday morning unleashed the storm on the stock market on the stock of the tech giant: in Hong Kong it lost 9.4% in a few minutes, $ 26 billion canceled. But the arrested was not the famous Ma and had nothing to do with Alibaba.
The Hangzhou police intervened with a statement to specify that the name of the man put in the cell is written in three characters. It may seem like a riddle to us, but all Chinese know that the Chinese name of Jack (Ma Yun) instead consists of only two characters. Hence, an unfortunate case of assonance. The TV fixed the news by specifying that the arrested man was born in 1985 (Jack is from 1964). End of the misunderstanding. The stock market calmed down and the Alibaba stock recovered its losses. The Beijing press writes that the prisoner was directing the hardware research of an IT company. “He plotted with outside forces to subvert the state order and divide the nation,” the public security bureau reported.
About Jack Ma, who revolutionized Chinese (and globalized) e-commerce since 2020 an infinite number of rumors have been circulating. His extraordinary fortune, also cultivated by the Communist Party, ended in the autumn of 2020when he challenged the authorities by accusing them of managing the financial system “Like an old pawn shop” which stifled private initiative. After that exit, Jack Ma disappeared for months and it was feared that he had been arrested, as well as darkened. IS reappeared on minor occasionsorchestrated to reassure international investors: the last time it was spotted in Spain and the Netherlands “For a study trip on agricultural development”.
And while the founder is dedicated to agriculture, Alibaba has suffered severe punishment from the Chinese authorities: Ant’s IPO, its fintech arm which should have raised $ 37 billion, was canceled; a 2.8 billion mega-fine was imposed on him for exploiting a monopoly position; his value on the stock market fell by 340 billion dollars, between Hong Kong and New York. In fact, it was the entire hi-tech sector that suffered under the squeeze ordered by Xi Jinping for political and economic reasons. After Alibaba, Tencent (online entertainment and social media), Meituan (home delivery services), ByteDance (which controls TikTok), Didi (car rental with driver) were downsized and sanctioned. Big Tech has lost 2 trillion dollars of capitalization in two years.
Counterorder last week. The Politburo of the Party announced “regulatory adjustments to promote the healthy development of the economy based on digital platforms”. A truce. According to analysts, Xi needs Big Tech to shore up the Chinese economy damaged by medical lockdowns for the wave of Covid-19. Shares of Alibaba and Tencent have started to rise again. The misunderstanding about Jack Ma reminds us, however, that investors are always on the alert. Never say Ma (in China).
May 4, 2022 (change May 4, 2022 | 07:37)
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Alibaba collapses on the stock market because “Mr. Ma was arrested”, but it is an (almost) namesake
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