After Chinese state media CCTV reported the arrest of an individual surnamed “Ma” for subverting national security laws, Alibaba shares fell around 9.4% in Hong Kong, dropping the company’s market value by around US$26 billion, as skittish investors suspected it to be Alibaba co-founder Jack Ma.
In 2020, Ma stopped making public appearances after Chinese regulators stopped the IPO of his fintech company Ant Group. So even though none of the recent reports had been confirmed, accumulated fear was enough to spook investors into unloading their shares.
It turns out it wasn’t him – just someone with a similar name. Once CCTV made a correction and investors realized that, they mostly reinvested their money, and Alibaba shares made a swift recovery.
The security bureau in Hangzhou, where Alibaba and Ant Group are headquartered, said it took “criminal coercive measures” on this individual for engaging in activities that endangered national security. Both Alibaba and Ant Group have yet to comment on this matter.
Investors’ reaction “shows the relatively weak sentiment in the tech space,” said Willer Chen, an analyst at Forsyth Barr Asia Limited, a Hong Kong-based institutional advisory business. “I think the market is just a bit too sensitive on this.”