Shares of Alibaba and other companies controlled by Chinese billionaire Jack Ma rose on Monday after it was announced that Ma would give up control of the companies. Ma, who is the founder of Alibaba Group Holding Ltd and Ant Group Co Ltd, will step down as chairman of the two companies and will not seek re-election to the boards.
Shares of Alibaba Group Holding Ltd and other companies controlled by Jack Ma rose significantly on Monday, with Alibaba’s Hong Kong-listed shares jumping 7%. Other companies that saw gains include Longshine Technology Group Co Ltd, Jilin Zhengyuan, Shanghai Golden Bridge Infotech Co, Orbbec Inc, and Hundsun Technologies.
Ant groups share prices surge
Ant Group, a financial technology firm controlled by Ma, owns stakes ranging from over 20% to slightly more than 5% in these companies. The stock price increases followed the announcement that Ma will give up control of Alibaba and Ant Group and will not seek re-election to the boards of the companies.
The move comes after Ma faced scrutiny from Chinese regulators over his business practices and comments he made critical of the country’s financial system. In November, the initial public offering (IPO) of Ant Group, a financial technology firm controlled by Ma, was suspended by regulators just days before it was set to go public.
Following the announcement of Ma’s departure, shares of Alibaba Group Holding rose by 4.4%, while shares of Ant Group rose by 5%. Other companies controlled by Ma, including China Music Corp and Yunfeng Capital, also saw gains. The changes at the top of Alibaba and Ant Group come as the Chinese government cracks down on tech firms and increases regulation in the sector. However, analysts expect the companies to continue to perform well under new leadership.
The China Banking and Insurance Regulatory Commission (CBIRC) approved a capital increase of CNY 18.5 billion ($2.68 billion) for Ant Group’s consumer finance arm in December. This followed reports in November that Chinese authorities were planning to impose a fine of more than $1 billion on Ant Group, which could signal the end of the company’s two-year regulatory overhaul.
Ant Group, the financial technology firm controlled by Chinese billionaire Jack Ma, has been undergoing a regulatory overhaul for the past two years. The process began in November 2019, when the company’s initial public offering (IPO) was suspended by Chinese regulators just days before it was set to go public. The IPO was seen as a major test of investor sentiment towards China’s tech sector, and the suspension was seen as a blow to the sector.
