Alibaba soars but questions remain as Ma resurfaces

Top News | BLOOMBERG 21 Jan 2021

Jack Ma Yun has resurfaced for the first time since Beijing began clamping down on his business empire nearly three months ago, appearing in a live-streamed video that sent Alibaba's stock soaring but left plenty of unanswered questions about the billionaire's fate.

Ma spoke briefly yesterday during an annual event he hosts to recognize rural teachers. In one video of the event, Ma can be seen touring a primary school in his hometown, Hangzhou.

The tycoon, who had stayed out of public view since regulators suspended the initial public offering of Ant Group, told the teachers he will spend more time on philanthropy.

Ant confirmed the authenticity of the video, first posted on an online blog. Shares of Alibaba jumped 8.5 percent in Hong Kong and were up almost the same level in premarket US trade.

Speculation about Ma's whereabouts and his standing with President Xi Jinping's government had reached a fever pitch in recent weeks, after regulators ordered Ant to overhaul its business and began an antitrust investigation into Alibaba.

Beijing's crackdown followed an October speech by Ma in which he infamously rebuked "pawn shop" Chinese lenders, regulators who don't get the internet and the "old men" of the global banking community.

Ma's comments yesterday struck a different tone. He spoke about the importance of reviving the countryside and narrowing income disparities by encouraging the return of younger talent to rural areas.

"Recently, my colleagues and I have been studying and thinking. We made a firmer resolution to devote ourselves to education philanthropy," Ma said. "Working hard for rural revitalization and common prosperity is the responsibility of our generation of businessmen."

Ma had kept out of public view since regulators in November scuttled Ant's US$35 billion (HK$273 billion) initial public offering, tightened fintech regulations and launched a separate probe into Alibaba - all in a span of weeks.

"Jack Ma's unexpected reemergence - just as sudden as his earlier disappearance - is likely a sign that his relationship with Beijing's regulatory authorities has stabilized," said Brock Silvers, a managing director at private equity fund Kaiyuan Capital.

But Ma probably is not out of the woods, Silvers added. "A path acceptable to all parties may have been identified, but Ant Group still looks likely to be disaggregated and regulatory restrictions will almost surely take a significant bite out of Ant's former valuation."

The clampdown on Ma's empire is part of a broader campaign to rein in a generation of Chinese tech giants that Beijing views as wielding too much control over the world's second-largest economy.

Ma's appearance may boost market sentiment on Alibaba and alleviate worst-case investor concerns. However, the monopoly probe launched in December by China's State Administration for Market Regulation is yet to be resolved and may continue to weigh on the company's future acquisitions and broader business practices.

Editorial: Ma raises 'soft-landing' hope

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