Ma Yun’s Christmas nightmare: Alibaba stocks plunge after Chinese antitrust investigation

Christmas Eve nightmare. Alibaba has reached its worst Christmas.

Alibaba’s stock price, listed on the US New York Stock Exchange on the 24th (local time), closed at $222, down 13.34% from the previous day. It is an all-time high with a daily decline. This is a 30% drop from the peak in October. Alibaba’s stock price, listed on the Hong Kong Stock Exchange, also fell 8% on the same day.

Alibaba, a symbol of China’s economic prosperity and information technology (IT) development, is going through a season of trials. This is because Ant Group’s listings in Shanghai and Hong Kong, which were scheduled for the 5th of last month, were suspended indefinitely, and the level of pressure against the founder Ma Yun, who has been properly ugly by the Chinese authorities, is increasing day after day.

In a keynote speech at the Shanghai Bund Financial Summit last October, Ma Yun poured out a sharp remark aimed at the authorities, saying, “We are trying to manage the airport like the Chinese authorities manage a train station. It is reported that the enraged State President Xi Jinping stopped the public offering of Ant Group, which was expected to be the world’s largest.

It was news of the launch of an antitrust investigation by China’s State Market Supervisory Service (SAMR) that gave a blow to Alibaba’s stock price, which is in an early amnesty situation. On the same day, Xinhua News Agency reported that SAMR has initiated an investigation into the Alibaba Group’s forced choice of suppliers.

Already, SAMR has imposed a fine of 500,000 yuan for failing to report a transaction in the process of acquiring Intime Retail, an offline retailer, in 2017 by Alibaba.

In addition, it is known that the Chinese financial authorities will conduct a’we-tan’ for Ant Group, a fintech subsidiary of Alibaba. Wetan is when government authorities call a person in charge of a supervised company to communicate the request. It is the second time the Wetan has been against the Ant Group after last month with a call with the personality of’catching the flag’.

Bloomberg reported, “Along with Alibaba, there is increasing pressure on Ant Group, one of the key pillars of Ma’s internet empire,” he said.

Therefore, headwinds against Ma Yun and Alibaba are expected to continue for the time being. This is because the Chinese authorities’ taming of the increasingly influential’platform company’ is in earnest.

“The Chinese authorities seem to want a smaller, less influential, more compliant company,” said a researcher at the Internet Financial Research Institute, Dong Miao Zong Gwan-chun, in an interview with Bloomberg. “It looks like the speed of the joint operation against the old Marwin Empire is accelerating.”

Ma Yun and Alibaba appear to be lowering themselves under pressure from the Chinese authorities. Alibaba said it would cooperate with the supervisory authorities’ antitrust investigation. After the listing of Ant Group was postponed, Ma Yun is refraining from appearing or speaking in public. The Wall Street Journal (WSJ) reported that it even suggested nationalization of Ant Group to Chinese authorities.

Reporter Ha Hyun-ok [email protected]