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Tech

Alibaba loses $26B in market value on rumors of Jack Ma’s ‘arrest’

By
Ariel Zilber
Published May 4, 2022
Updated May 4, 2022, 10:22 a.m. ET

Alibaba co-founder Jack Ma’s rumored arrest — which later turned out to be false — sent shares of the company falling by as much as 10% within minutes on Tuesday morning and cost the firm $26 billion in value.

The billionaire Ma has scarcely been seen in public since the Chinese government launched a crackdown on big businesses in late 2020.

On Tuesday, China state-run media reported that a man with the same name as Ma’s — which is a very common name in China — was arrested by authorities for alleged national security violations.

The arrest took place in the Chinese city of Hangzhou, which is where the e-commerce company is based.

News of the arrest of “Ma” rattled the markets as investors started selling off Alibaba stock. The company’s share price dipped 9.4% in early trading in Hong Kong on Tuesday, according to Bloomberg News.

But state-run media issued a clarification, noting that the person in question was not the Alibaba co-founder.

False reports of Ma's arrest sent Alibaba stock plummeting on Tuesday.
False reports of Ma’s arrest sent Alibaba stock plummeting on Tuesday. Getty Images

The arrested individual, who was identified as an employee of a local IT company, was born in 1985 — which makes him at least 20 years younger than Ma.

After the clarification, Alibaba’s shares recovered most of their losses.

Ma has been largely absent from the public stage since November of 2020, when he was hauled in for questioning by regulators for criticizing China’s state-owned banks.

A scheduled IPO of his other company, Ant Group, was shelved as a result.

Alibaba lost $26 billion of its market value before it recovered later on Tuesday.
Alibaba lost $26 billion of its market value before it recovered later on Tuesday. Bloomberg via Getty Images

Ma’s silencing coincided with Beijing’s antitrust crackdown on large tech firms which until then had been allowed to operate relatively freely.

The government moved against tech unicorns like Alibaba, Tencent, Meituan, and Didi.

Last year, Alibaba was fined a record $2.75 billion in April over monopoly violations.

Ma, the former English teacher, disappeared from public view for three months before surfacing in January 2021, speaking to a group of teachers by video. That eased concern about his unusual absence from the limelight and sent Alibaba shares surging.