A Chinese man with the nickname “Ma” was arrested. The news wiped out $26 billion of Alibaba stock
Alibaba, the Chinese e-commerce giant that Ma co-founded, saw its Hong Kong-listed shares drop as much as 9.4% on Tuesday after Chinese state media reported that an individual named “Ma” in Hangzhou – where Alibaba is headquartered – They were arrested on national security grounds.
According to China’s state broadcaster CCTV, the suspect was placed under “compulsory measures” on April 25 on suspicion of “collusion with hostile anti-China forces abroad” for “inciting separatism” and “inciting the undermining of state power.”
The one-sentence report, which was quickly picked up by other state media and alerted across Chinese news platforms, sparked panic selling in Hong Kong, wiping out an estimated $26 billion from Alibaba’s market value in a matter of minutes. .
Amid the frenzy, Hu Shijin, former editor-in-chief of the state-owned national newspaper Global Times, rushed to Shows On China’s Twitter-like Weibo, the report was misleading because the suspect’s name in question consisted of three letters. Jack Ma’s Chinese name, Ma Yun, has only two letters. (CCTV later quietly updated its original report to match Hu’s assessment.)
To further dispel concerns, the Global Times reported that the accused man was born in 1985 in Wenzhou (while Jack Ma was born in 1964 in Hangzhou) and worked as a director of hardware research and development at an IT company.
Clarifications led to a rebound, with Alibaba recovering most of its losses by the end of the day.
The market reaction is the latest sign of how nervous investors are in China’s embattled technology sector, which has been the target of the Chinese government’s severe regulatory crackdown since late 2020.
Despite recent signals from the Chinese government, it is preparing to back down from the campaign due to the economic impact, primarily Reported by The Wall Street JournalThe market frenzy on Tuesday indicates that investor confidence is still shaken.
“I thought this was a strange episode,” said Victor Shih, a professor of political science at the University of California, San Diego. “Whether that’s some kind of warning to the tech sector as a whole, or maybe Jack Ma personally. Who knows? But it sure has been proven that the government doesn’t even have to arrest a top tech executive to erase tens of billions of dollars from the company’s market valuation. You just need to post some kind of information.”