Ali Hasan
Jack Ma is finally back after almost 3 months of speculations. He went missing in October 2020 when he criticized the banking regulations of the Chinese banks. Then the much awaited IPO of his Ant group was halted and he was investigated by the Chinese regulators and authorities.
The Chinese government’s regulatory action has forced Alibaba-affiliate Ant Group to suspend its plans for a $37 billion initial public offering (IPO). Then a report came which stated that he isn’t missing or arrested but is rather laying low due to the new situation. Although many people were still not convinced and thought that something’s fishy.
Now putting a rest to all speculations, he has emerged all good and that’s touted as a sigh of relief worth $58 billion as that’s how much Alibaba Group Holding Ltd market value soared after a clip of Ma speaking to a group of teachers began circulating online. To put this in perspective, this is around 2% of the total market capitalization of Indian companies listed on the BSE on January 20.
On Wednesday, January 20th 2021, Jack Ma participated in a live-streamed video conference and this was enough to tell people that he’s fine and doing well (at least). He appeared for less than a minute and said nothing about the Chinese government clampdown that had left his business empire in crisis.
But for investors who’d been waiting months to catch a glimpse of Jack Ma, the entrepreneur’s participation in a live-streamed video conference on Wednesday was quite a relief in itself. Speculation surrounding his disappearance began in January as he did not appear on a reality TV show where he was a judge. Analysts told the publication that his appearance is a sign of the likelihood of jail time or a government takeover of the e-commerce major.
“There’s still a lot of uncertainty on regulators’ next moves, but this does mean the status of Jack Ma is much better than a lot of people speculated,” Fang Kecheng, a professor at the Chinese University of Hong Kong told Bloomberg.
“Alibaba is not out of the doghouse, but at least it’s clear that the current anti-monopoly drive is not about punishing Jack Ma,” said Zhang Fushen, senior analyst at Shanghai PD Fortune Asset Management.
Ma’s resurfacing appeared to be carefully calibrated, according to Justin Tang, head of Asian research at United First Partners in Singapore. The video conference was part of an annual event Ma hosts to recognize rural teachers. A former English teacher himself, Ma spoke in a solemn tone about the need to create better education opportunities in China’s poorer 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 for 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 school teacher versus being a haughty entrepreneur that doesn’t know his place. The whole scene allows him to show contriteness without being scripted.”
The big question facing investors now: to what degree will Beijing keep tightening the screws on Ant, Alibaba and its peers? The early evidence suggests regulators aren’t in a hurry to let up. Just a few hours after Ma’s reappearance, China’s central bank released draft rules to curb market concentration in online payments, potentially dealing another blow to Ant and rival Tencent Holdings Ltd.
The move is part of a wide-ranging 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.
Mitchell Green, a founding partner of Lead Edge Capital who holds shares of Alibaba, expects Ma to focus primarily on charity work going forward, a shift that began a few years ago. Green said he’s still optimistic about the long-term prospects for both Alibaba and Ant. “Both are very important to China’s economy and its people,” he said.
