Alibaba Stock Falls, Then Recovers, After State Media Report | Investment News

HONG KONG (Reuters) – Alibaba shares fell 9% on Tuesday after a state media report said Chinese authorities took action against an individual surnamed Ma, but recouped the losses after the report was revised. to clarify that he was not the founder of the company.

State broadcaster CCTV first reported that authorities in the city of Hangzhou, Alibaba’s headquarters, have taken action against an individual named Ma, whose name consists of two Chinese characters, suspected of use the Internet to engage in activities that endanger national security.

The broadcaster later revised the article to clarify that the individual in question had a three-character name, indicating that it was not Alibaba’s billionaire founder Jack Ma.

An Alibaba spokesperson did not immediately respond to a Reuters request for comment on the media report.

Alibaba shares fell 9.4% in early Hong Kong trading in a broader and firmer market. It then pared most of its losses and was trading down 1.1% at 03:10 GMT.

“Saying that a guy with the last name Ma in Hangzhou helped with an investigation sparked panic, but as more clarifications emerged… (it helped) calm the market down,” Steven said. Leung, director of sales at UOB brokerage Kay Hian.

Shares of Alibaba and other Chinese internet companies have come under pressure over the past two years amid an unprecedented regulatory crackdown on the industry for breaches of antimonopoly, data privacy and other rules.

Authorities cracked down on Ma’s business empire after he gave a speech in Shanghai in October 2020 accusing financial watchdogs of stifling innovation.

Regulators suspended the $37 billion listing of its fintech company Ant Group two days before its planned Nov. 5, 2020 debut, ordered Ant’s restructuring and launched antitrust investigations into Ma’s business, ultimately leading to a record $2.75 billion fine for Alibaba in April. 2021.

Ma himself has kept a low public profile since the crackdown began.

(This story refiles to clarify that there was only one report)

(Reporting by Donny Kwok in Hong Kong and Brenda Goh in Shanghai; Writing by Sumeet Chatterjee)

Copyright 2022 Thomson Reuters.

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