A Jack Ma sighting on a yacht can move markets. When Alibaba’s charismatic founder visited Majorca last October, Alibaba shares soared. Ma, who is reported to be back in Europe, is also behind Friday’s 6 percent drop.
mother is planning to relinquish control from the Ant group, in which he holds 51% of the voting rights. The withdrawal comes two years after Beijing suspended Ant’s record-breaking listing, which would have raised $37 billion, valuing the payments partner at about $315 billion.
On the surface, the market reaction is surprising. Ma resigned as chairman of Alibaba in 2019 and stepped away from day-to-day operations.
Some may even have expected a spike in the stock price. Ma provoked officials with his blunt criticism of the “pawn mentality” of China’s state-owned banks in 2020. This was on top of their business disruption caused by Ant’s rapid growth in digital payments and retail deposits. Alibaba and Ant were the focus of Beijing’s first major probe by regulators that has hit the technology sector. Ma’s exit will make the companies less of a target.
But the move hurts ant’s chances of registration. For Alibaba, which owns about a third of Ant’s shares, an IPO was one of the few ways it could boost its troubled sales and price growth. The stock is down nearly 70% since its peak in 2020. It trades at just 14 times forward earnings, less than half that of local peers such as JD.com
Companies that undergo changes of control have to wait three years before they can be listed on the Chinese markets. In Hong Kong, the requirement is one year. This puts hopes of a registry revival too far away.
Previous surges in Alibaba’s share price, triggered by Ma’s observations, reflect the value investors placed on his innovative ideas and leadership. These gains will become less frequent with Ma’s exit.
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Alibaba/Jack Ma: sightings in Europe will no longer boost falling stock Source link Alibaba/Jack Ma: sightings in Europe will no longer boost falling stock