A Chinese man nicknamed “Ma” was arrested. The news erased $26 billion from Alibaba shares

A Chinese man nicknamed “Ma” was arrested. The news erased $26 billion from Alibaba shares

A Chinese man nicknamed "Ma" was arrested.  The news erased $26 billion from Alibaba shares

Alibaba, the Chinese e-commerce giant co-founded by Ma, saw its Hong Kong-listed shares plunge as much as 9.4% on Tuesday after Chinese state media reported that an individual nicknamed “Ma” in the city from Hangzhou – where Alibaba is based – had been detained on national security grounds.

According to Chinese state broadcaster CCTV, the suspect was placed under “compulsory measures” on April 25 on suspicion of “colluding with foreign forces hostile to China” to “incite secession” and “incite subversion of state power”.

The one-sentence report, which was quickly picked up by other state-run media and alerted on Chinese news platforms, sparked a panic sell-off in Hong Kong, wiping around $26 billion off the market value from Alibaba in minutes.

Amid the frenzy, Hu Xijin, the former editor of state-nationalist tabloid the Global Times, was quick to clarify on China’s Weibo Twitter that the report was misleading because the name of the suspect in question has three characters. . Jack Ma’s Chinese name, Ma Yun, has only two characters. (CCTV then quietly updated its original report to match Hu’s assessment).

To further dispel concerns, the Global Times reported that the defendant 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.

The clarifications led to a rebound, with Alibaba recouping the majority of its losses by the end of the day.

The rollercoaster market reaction is the latest sign of investors’ reluctance to overcome China’s beleaguered tech sector, which has been the target of the Chinese government’s harsh regulatory crackdown since late 2020.

Despite recent signals from the Chinese government it is preparing to call off the campaign due to the economic impact, as The Wall Street Journal first reported, Tuesday’s market frenzy indicates investor confidence remains brittle.

“I thought it was a weird episode,” said Victor Shih, a political science professor at the University of California, San Diego. “Whether this is some kind of warning to the tech industry as a whole, or maybe Jack Ma personally. Who knows? But it’s certainly been shown that the government doesn’t even need to arrest a senior technology to erase tens of billions of dollars from a company’s stock market valuation. All it needs to do is release some kind of information,” Shih added.

“It’s quite powerful. And certainly what happened yesterday was a clear illustration of that power, whether it was delivered or not.”

Jack Ma, founder of Alibaba, in Paris in 2019.

But the fact that investors were so quick to believe that Jack Ma, once China’s most high-profile billionaire, would fall foul of state security authorities reveals part of the political reality people now live in. many Chinese tycoons.

“It doesn’t really matter anymore if it’s really him. The important thing is that a lot of people think it’s him, a lot of people expect it to be him, now that’s interesting said a popular comment on Weibo, which drew 57,000 likes.

The turn of public opinion against Ma is almost as dramatic as his rags-to-riches story. Until about three years ago, the English teacher-turned-billionaire was widely revered for his charisma, outspokenness and personal success. (He was even nicknamed “Daddy Ma” by some fans).

But as tech companies like Alibaba have expanded their business empires, they have become the target of growing frustration and resentment among young Chinese workers who are fed up with grueling long hours, high pressure and stagnant wages. (Jack Ma’s endorsement of China’s so-called “996” work culture, which means working from 9 a.m. to 9 p.m. six days a week, drew heavy criticism in 2019.)

As tech giants fell under the Chinese government’s crosshairs, “bad capitalists” were increasingly blamed for various social ills, from cutthroat competition, from soaring real estate prices to the lack of of social mobility.

“In just a few years, ‘Papa Ma’ has been branded a ‘rotten capitalist’ in public opinion, and many people are looking forward to Ma’s downfall,” Xiang Dongliang, a blogger, wrote on WeChat.

“But the question is, will bringing down the capitalists and driving out the (so-called) alien forces will really improve everyone’s life?”

Jack Ma has mostly disappeared from public life and kept a low profile since Ant Group’s U.S. IPO was halted by regulators in late 2020. Once among China’s most outspoken figures , he hasn’t posted anything on Weibo, where he has almost 25 million followers, since October 2020.

His latest post on Weibo, about a meeting with around 100 school principals to discuss the future of education in China, was flooded with critical comments.

“I wouldn’t be surprised if old Ma ever gets jailed,” the lead commentary said. “You’re just a capitalist! Don’t pretend to be a good person!” shouted another comment.

Jack Ma remained silent throughout Tuesday as rumors against him circulated on the Chinese internet. Hashtags about the detention of the suspect surnamed Ma were among the most popular topics on Weibo, attracting hundreds of millions of views.

“He only has silence, which is a ‘special way of existing,'” Zhang Feng, a columnist, wrote in a widely shared WeChat post following the incident.

“This kind of silence has a deep meaning. For a public figure, his speech itself is an ‘extension’ of his existence. When a person no longer speaks, although still alive, continues to make things, at least a part of himself has “disappeared”.

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