Itโs really telling how much trust the investors have in Alibaba Group Holding (or really, the lack of) that a bad news report of someone sharing the same surname as the founder is enough to make the stocks plunge by nearly a tenth of its original value.
In less than a day too.
Itโs like Tesla and SpaceXโs stocks dropping the moment it was made known that someone surnamed โMuskโ allegedly had an affair with Amber Heard, as if those scandalous rumours have anything to do with his decision-making skills.
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But then Elon Musk also bought Twitter recently, so maybe casting a bit of doubt isnโt wrong?
Digression aside, we are talking about the Chinese authorities here, taking action against a certain individual, after said Chinese government went on a year-long crackdown on anti-monopoly, data policy and privacy rules, which heavily affected the tech industry.
Ah, the joys of being run by a Communist-based but still-Capitalist government.
The Mistake in the Ma Name
The panic started when state broadcaster CCTV first reported that the local authorities in the city of Hangzhou, where Alibabaโs headquarters is located, had taken action against an individual by the surname of โMaโ, whose full name consisted of two Chinese characters.
The accused was suspected of inciting subversion of state power and other activities that could possibly endanger the nationโs security, and curbs were subsequently imposed on him.
While Westerners mostly know Alibabaโs founder as โJack Maโ, that simple name is probably just a tactic to keep his non-Chinese investors and friends from butchering the pronunciation of the real name he was given at birth.
His Chinese name consists of only two simple characters, โ้ฉฌไบโ (Ma Yun).
Why his parents decided that horse and clouds would go well together is something probably only they would know, or they just didnโt want to torment their child with having to write too many strokes to spell his name.
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In any case, the coinciding location, surname, and name, plus the Chinese governmentโs harsh stance towards the tech industry caused investors and speculators to worry about the fate of Alibaba.
As a result, Alibabaโs stocks dropped as much as 9.4% in the early hours in Hong Kong, eradicating roughly $26 billion of its market value.
However, the state broadcaster CCTV later revised the article to make it clear that the suspect had a three-character name, which meant that the person in trouble definitely wasnโt Jack Ma.
By 0310 GMT, the stocks rose back up again, though it fell short of its previous record by 1.1%.
According to an analyst from Forsyth Barr Asia Ltd, Willer Chen, the investorsโ reaction displays the relatively weak sentiments they have regarding the tech space.
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Trouble with Authority
The investorsโ scepticism isnโt unwarranted though.
Back in October 2020, the government had taken harsh actions against Maโs business empire after he gave a speech in Shanghai about financial watchdogs stifling innovation.
Regulators suspended the $37 billion listing of his fintech firm Ant Group prior to its planned debut on 5 November 2020, demanding for Ant to be restructured and launched antitrust investigations into Maโs business ventures.
Consequently. Alibaba was slapped with a record fine of $2.75 billion in April 2021.
Thatโs one way to fill the national treasury and to make an example out of someone.
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Since that incident, Ma has kept a low profile.
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