Alibaba stocks worth $26 billion were wiped out after a businessman with the last name “Ma” was arrested. Alibaba, the Chinese e-commerce behemoth Ma co-founded, had its Hong Kong-listed shares drop as much as 9.4% on Tuesday after Chinese state media claimed that a person with the surname “Ma” had been detained on national security concerns in Hangzhou, where Alibaba is situated.
According to China’s state broadcaster CCTV, the suspect was placed under “compulsory measures” on April 25 on suspicion of “colluding with overseas anti-China hostile forces” to “incite secession” and “incite subversion of state power.”
The one-sentence revelation sparked panic selling in Hong Kong, wiping off an estimated $26 billion from Alibaba’s market value in minutes. It was quickly taken up by other state media sites and notified across Chinese news networks.
In the midst of the uproar, Hu Xijin, the former editor-in-chief of the state-owned nationalist newspaper Global Times, raced to clarify on China’s Twitter-like Weibo that the report was false because the suspect’s name includes three characters. Ma Yun, Jack Ma’s Chinese name, is merely two characters long. (CCTV’s original story was then secretly changed to fit Hu’s opinion.)
To allay fears, the accused guy was born in 1985 in Wenzhou (although Jack Ma was born in 1964 in Hangzhou) and worked as the director of hardware research and development at an IT firm, according to the Global Times.
Following the clarifications, Alibaba’s stock rose, recouping the majority of its losses by the end of the day.
The market’s ups and downs are the latest indications of how wary investors are about China’s troubled tech sector, which has been the subject of the Chinese government’s harsh regulatory campaign since late 2020.