Jack Ma, Alibaba's co-founder, has returned to China after spending about a year abroad, mainly in Japan, according to The Wall Street Journal. This might indicate a possible easing of the Chinese government's crackdown on tech companies and their influential executives. Ma had been scarcely seen in China since his criticism of Chinese regulators in a 2020 speech.
Upon news of Ma's return, Alibaba's (BABA) shares initially rose over 3% in Hong Kong but ultimately closed 0.1% lower.*
Performance of Alibaba Group Holding LTD stock since listed on HKEX. Source: tradingview.com
Alibaba's American depositary receipts were also down 0.1% in premarket trading. Ma's return could suggest that Beijing is acknowledging the importance of a more supportive stance towards domestic entrepreneurs, given concerns about the broader economy. This would be a positive development for Alibaba stock, which could see gains as Covid-19 restrictions in China are relaxed.
However, investors may still approach the situation with caution. In January, Alibaba shares spiked when Ma relinquished control of Ant Group, a Chinese fintech company, as this was expected to pave the way for Ant's highly anticipated IPO. Since then, those expectations have waned, with Bloomberg reporting that an Ant IPO is unlikely to occur this year. Alibaba's ADRs have decreased by 1.4% so far this year.*
Performance of Alibaba Group Holdings Ltd. ADR stock over 5 years. Source: tradingview.com
* Past performance is no guarantee of future results.
