Wednesday, May 12, 2021

Now You See It: Jack Ma Surfaces, Giving Alibaba A $ 58 Billion Boost | Business and economic news

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He appeared for less than a minute and said nothing about the Chinese government’s crackdown that left its business empire in crisis.

But for investors who waited months to catch a glimpse of Jack Ma, the entrepreneur’s participation in a live-streamed video conference on Wednesday was enough to trigger a $ 58 billion sigh of relief. This is how much the market value of Alibaba Group Holding Ltd. has skyrocketed after a clip of Ma speaking to a group of teachers began circulating online – her first public comment since she disappeared from sight late last year.

Much about the future of the most famous Chinese businessman remains unclear. Still, analysts said Wednesday’s video was a sign that worst-case scenarios – such as Ma’s jail time or a government takeover of her companies – are likely now off the table. Ma is unlikely to have participated in the event without at least Beijing’s tacit approval; State media, including the Global Times, were among the media that published extracts of his speech or wrote stories about his appearance.

“There is still a lot of uncertainty about the next actions of the regulators, but it means that Jack Ma’s status is much better than many people have assumed,” said Fang Kecheng, professor at the University of China. Hong Kong.

Ma’s lecture focused on philanthropic issues, including the importance of reducing income disparities and reviving the Chinese campaign, two top priorities for Xi Jinping’s Communist Party. While far from a mea culpa, the comments offered a stark contrast to Ma’s last public remarks in October, when the billionaire embarked on an unusually strong rebuke from Chinese regulators and state-owned banks.

Just days after that now infamous Bund summit speech in Shanghai, the government torpedoed Ma’s plan to go public with Ant Group Co. in what would have been the world’s largest initial stock sale ever. In the weeks that followed, authorities called for an overhaul of Ant’s business and launched an antitrust investigation into Alibaba.

Few people expect Ma’s change in tone to cause Beijing to abandon its campaign to more tightly regulate Ant, Alibaba, and the rest of China’s tech giants. But market reaction on Wednesday suggests that investors are starting to assess the risk of a crackdown that would put the nation’s wealthiest entrepreneurs and most innovative companies at serious risk.

“Alibaba is not outside the niche, but at least it’s clear that the current anti-monopoly campaign is not about punishing Jack Ma,” said Zhang Fushen, senior analyst at Shanghai PD Fortune Asset Management.

Speculation about Ma’s whereabouts has escalated in recent weeks after it emerged that he skipped the recent recording of a Shark Tank-like TV show he created. In the past, Chinese authorities have quietly detained billionaires who clash with the Communist Party.

Ma’s resurfacing appears to have been carefully calibrated, according to Justin Tang, head of Asian research at United First Partners in Singapore. The videoconference was part of an annual event organized by Ma to recognize rural teachers. A former English teacher himself, Ma spoke solemnly about the need to create better educational opportunities in poorer parts of China.

“Recently my colleagues and I have studied and reflected. We have made a firmer resolution to dedicate ourselves to educational philanthropy, ”Ma said.“ Working hard for rural revitalization and common prosperity is the responsibility of our generation of businessmen. ”

It was “the perfect setting for Jack to reappear in the public spotlight,” Tang said. “The backdrop sees Jack in his roots as a humble teacher instead of a haughty entrepreneur who doesn’t know his place. The whole scene allows him to show contrite without being scripted.

Ant, which is controlled by Ma and partially owned by Alibaba, confirmed the authenticity of the video but declined to comment further.

The big question for investors now: How far will Beijing continue to tighten the screws on Ant, Alibaba and its peers? Early evidence suggests that regulators are in no rush to let go. Within hours of Ma’s reappearance, China’s central bank released draft rules to curb the concentration of the online payments market, which could deal another blow to Ant and rival Tencent Holdings Ltd.

The move is part of a larger campaign to curb a generation of Chinese tech giants Beijing sees as exercising too much control over the world’s second-largest economy.

Despite the excess of regulation, Alibaba bulls in companies such as Amber Hill Capital Ltd. and Pegasus Fund Managers Ltd. said that allaying concerns about Ma’s status might be enough to bring the e-commerce company’s shares back to its all-time high in October. That would imply a gain of around 15% in Hong Kong-listed stocks from their close on Wednesday.

Mitchell Green, a founding partner of Lead Edge Capital which owns shares of Alibaba, expects Ma to focus primarily on charitable work in the future, a shift that began a few years ago. Green said he was still optimistic about Alibaba and Ant’s long-term prospects. “Both are very important to the Chinese economy and its people,” he said.



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