Type to search

Alibaba shares soar after Jack Ma re-emerges

(ATF) Shares in internet tech giant Alibaba soared on Wednesday after its founder Jack Ma resurfaced after nearly four months, and ended speculation about his well-being.

The company’s stock shot up 10.5% on Hong Kong, adding HK$600 billion (US$78 billion) to the company’s capitalization, after the billionaire appeared in an online video.

The re-emergence of Ma, in a short video message, reassured investors who had been spooked after he disappeared and company leaders who have taken over since he retired in 2019 were hauled in front of top regulators following a speech he gave at a forum in Shanghai in late October, in which he criticized oversight of the country’s financial system.

Speculation over Ma’s whereabouts has swirled in the wake of news earlier this month that he was replaced in the final episode of a reality TV show he had been a judge on, amid the regulatory clampdown on his sprawling business empire. Opinion pieces in state media outlets have been increasingly critical of Ma in recent weeks, which led to concern on whether the entrepreneur had been taken into custody or was just lying low. It appears to have been the latter.

Ma spoke to a group of teachers by video, easing concern about his unusual absence from the limelight. That was enough to send shares in the e-commerce giant soaring.

The billionaire, who commands a cult-like reverence in China, had not appeared in public since the controversial speech, in which he said banking officials had a “pawnshop mentality”.

Shortly after, officials suspended the massive $37-billion IPO for Alibaba’s financial affiliate Ant Group.

Previously, Ma often appeared in public to speak at conferences and events, but less frequently than in 2019 due to the coronavirus pandemic.

Alibaba and his charitable foundation confirmed that Ma, a former English teacher, participated in an online ceremony for rural teachers organised by the foundation today (Jan 20). They declined to make any further comment. 

In the 50-second video, Ma, wearing a navy pullover, spoke from a room with grey walls, a large painting and floral arrangements. It was not clear where the room was, Reuters said.

The news was first reported by a media outlet backed by the government of Zhejiang, the province where Alibaba’s headquarters is based.

School visit

The video also contained footage, dated January 10, of Ma visiting a school in Tonglu county, which is part of Hangzhou city, the capital of Zhejiang, with colleagues.

“Jack Ma’s reappearance has given investors peace of mind after a lot of rumours, allowing them to pile into the stock which had been a laggard in the market,” Steven Leung, sales director at brokerage UOB Kay Hian in Hong Kong, said.

The stock rise erased some of the loss that Alibaba suffered after an anti-monopoly investigation was launched into its policies by Chinese authorities last month. But it is still about 11% below levels prior to the cancellation of the Ant IPO.

The topic “Jack Ma makes his first public appearance” and his video address to the teachers began trending on China’s Twitter-like Weibo, and triggered heavy discussion.

Although Ma has stepped down from corporate positions and earnings calls, he retains significant influence over Alibaba and Ant and promotes them globally at business and political events.

He also continues to mentor management talent in the “Alibaba Partnership”, a 35-member group of company managers.

The company plans to raise at least $5 billion through the sale of a US dollar-denominated bond this month.

ALSO SEE:

Campaign against Jack Ma intensifies

Ant Group IPO swept off the table

Global financial system must include internet banking 

Alibaba value plunges over $100bn over PBOC shakeup, anti-trust probe

Ant and Tencent drop ‘bank deposit shopping’ as Beijing cracks down

AF China Bond