Alibaba Group Holding Limited’s shares lost billions of dollars’ worth of market value in a matter of minutes after Chinese state media reported that a man with the surname Ma was detained last month.
Upon hearing about the report, several investors sold their Alibaba shares in Hong Kong on Tuesday after Chinese state-owned news outlet CCTV News published a vague news report about the man’s arrest in Hangzhou, Zhejiang Province, where Alibaba is based.
The man was reportedly arrested on April 25 after being suspected of “colluding with overseas anti-China hostile forces” to “incite secession” and “incite subversion of state power.”
Alibaba, which Jack Ma co-founded in April 1999, lost nearly 208.2 billion Hong Kong dollars (approximately $26.5 billion) – 9.4% of the company’s stock – minutes after the report began circulating online.
The Global Times, one of China’s English-language newspapers, stated that the 37-year-old man, who reportedly worked for an IT company as its director of hardware research and development, was born in 1985 in Wenzhou, Zhejiang Province. Meanwhile, Alibaba’s founder was born in Hangzhou in 1964.
The newspaper also claimed that the arrested man “spread rumors and disinformation and release [sic] so-called independence declarations to split the country and subvert the state.”
“According to information the Global Times has acquired, aside from forming illegal organizations and making political outlines to subvert the state, Ma also targeted young people and university students, inciting them to join in activities that smear the country and the people,” the newspaper added.
CCTV News’ initial report claimed the detained man has two characters in his full name. The Global Times reported that the man’s name has three characters, not two. Jack Ma’s full Chinese name, Ma Yun, has two characters.
Alibaba’s stock gained back most of its losses by the end of the day on Tuesday after The Global Times published its report.
Some Weibo users questioned CCTV News’ initial report, with one user saying, “It is not clear why CCTV did this. … There are lots of people surnamed Ma in China.”
A person close to the news outlet claimed that security officials in Hangzhou forwarded the news about the arrested man to CCTV’s headquarters rather than its local bureau, which is reportedly the norm.
Wu Qiang, a former politics lecturer at Tsinghua University who now works as an independent analyst, told Nikkei Asia that the recent case was a “deliberate move to intimidate those who may endanger national security in any way.”
“Using all means available to amplify a small case indicates Beijing’s intention to prioritize national security by creating an atmosphere of fear for everyone,” Wu added.
Victor Shih, a political science professor at the University of California San Diego, told CNN that he considers the entire situation an “odd episode.” Shih also said that it is unclear if this serves as a warning to China’s technology sector or for Jack Ma. Many have speculated that the Alibaba founder went missing after he criticized China’s financial regulatory system at a conference in Shanghai in October 2020.
“Who knows? But it’s certainly demonstrated the government does not even have to arrest a senior technology executive to erase tens of billions of dollars from a company’s market valuation,” Shih continued. “It just needs to release some kind of information. That’s quite powerful. And certainly what happened yesterday was a clear illustration of that power, whether it was delivered or not.”
Jack Ma, who stepped down from his position as chairman of Alibaba in 2019, has yet to release any statements about the recent incident.