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(Dec. 30): Jack Ma’s net worth has plummeted by nearly $ 11 billion since late October, when China stepped up scrutiny of his empire and the country’s tech giants.
The 56-year-old former English teacher, often associated with the meteoric rise of China’s internet sector, peaked at $ 61.7 billion this year and was poised to regain the title of the richest person in Asia.
Now with a fortune of $ 50.9 billion, he has since dropped to 25th on the Bloomberg Billionaires Index, a list of the 500 richest people in the world.
While the co-founder of Alibaba Group Holding Ltd has been at the center of the crackdown, he is not the only one feeling the pressure.
Increased government scrutiny is forcing investors to reconsider their positions, after explosive demand for online services triggered by coronavirus lockdowns sent those stocks higher earlier this year. In recent weeks, China’s tech giants have lost hundreds of billions of dollars in market value.
Pony Ma’s Tencent Holdings Ltd is down 15% since the beginning of November and Wang Xing’s food delivery giant Meituan is down nearly a fifth from its peak last month. Alibaba’s US deposit receipts have dropped more than 25% since the end of October.
“There is a wave of similar signals showing that China’s tech giants remain on the authorities’ radar,” said Bruce Pang, head of macro and strategic research at China Renaissance Securities Hong Kong. “The written antitrust guide and the antitrust review are just two of those signs.”
Ma’s troubles began just as he was preparing to go public with payments company Ant Group Co. Instead, Chinese regulators withdrew what would have been the world’s largest initial public offering, just two days before its scheduled debut in November. .
The cessation of Ant’s $ 35 billion IPO was one of the first signs of China’s crackdown on an industry that has gained influence in the daily lives of hundreds of millions. After that, the nation’s authorities placed additional restrictions on the consumer loan sector, proposed new rules to curb the dominance of internet giants, and fined Alibaba and a unit of Tencent for acquisitions from years ago. Closer scrutiny by the government of mergers and acquisitions could add uncertainty to the growth of internet giants.
“If similar deals take place in the United States or Europe, for example, if Facebook merges with Google tomorrow, their authorities will also be cautious,” said Liu Cheng, a partner at the law firm King & Wood Mallesons in Beijing.
“The tech giants must pay more attention to meeting their daily operations.”
Despite the recent slump, China’s internet moguls have managed to build up their fortunes, as their companies’ shares rose earlier this year. The nation’s 21 tech billionaires tracked by the Bloomberg index have earned $ 187 billion in 2020. Even Ma’s net worth has risen $ 4.3 billion.
On the contrary, the titans of traditional sectors like real estate have been hammered. China Evergrande Group Chairman Hui Ka Yan has lost $ 7.4 billion in 2020, more than anyone else in the world.
China’s promise to step up antitrust efforts and prevent the disorderly expansion of capital will remain a focus for the government next year, said Pang of China Renaissance. A more regulated tech industry will help boost domestic consumption and grow the post-Covid economy as the rest of the world struggles to contain the pandemic, he said.
“We view the latest regulatory move as an ongoing effort on the path of China’s regulatory reform, which seeks to achieve greater fairness in the market and foster healthy development of the entire economy, as well as areas where the monopoly potential of Internet companies have a material impact, “Pang said.
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