Jack Ma Backs Off on Plans to Sell Alibaba Shares After Stock Plunge

Jack Ma postponed selling hundreds of millions of dollars worth of Alibaba shares following the sharp decline in the Chinese tech giant’s stock last week.

Jack Ma Backs Off on Plans to Sell Alibaba Shares After Stock Plunge
Jack Ma Backs Off on Plans to Sell Alibaba Shares After Stock Plunge

Last Thursday, two regulatory filings disclosed that Ma intended to sell 10 million shares, valued at almost $871 million.

Jack Ma Backs Off on Plans to Sell Alibaba Shares After Stock Plunge

The company’s stock price fell below the billionaire’s expectations, so he hasn’t sold “a single share,” as stated in a Wednesday post by Alibaba (BABA) Chief People Officer Jane Jiang Fang on the company’s internal forum.

Initially, the sales were scheduled for this Tuesday through JC Properties and JSP Investment, two entities connected to Ma and his philanthropic foundation, as per the filings.

The announcement of the planned sales coincided with Alibaba’s third-quarter earnings report. On that day, the company revealed its decision to abandon the spin-off of its cloud computing arm, citing uncertainties arising from US controls on chip exports to China.

On Thursday, Alibaba’s stock dropped by 9% in New York, followed by nearly a 10% decrease in Hong Kong on Friday, resulting in a loss of approximately $20 billion from the company’s market value. Year-to-date, Alibaba’s shares have declined by more than 10%.

Unraveling Alibaba’s Strategic Moves: Dismissing Rumors

Jiang dismissed the notion that the simultaneous release of both pieces of news was anything more than a “coincidence.” While the news of the sale sparked rumors about Ma losing confidence in the company, Jiang encouraged employees to disregard such speculations. She explained that the transactions were part of a long-term plan outlined in August, aiming to enable Ma’s office to invest in agricultural technology and welfare projects globally.

According to Jiang, Ma holds the belief that the stock of the Hangzhou-based firm “is currently significantly lower than Alibaba’s actual value, and he will not sell it.

Alibaba Chairman Joe Tsai expressed his “full confidence” in the company in a comment on the same post.

Ma’s foundation and Alibaba did not promptly respond to requests for comments on the matter or clarify whether the share sale would proceed in case of a rebound in the company’s stock price.

The group is presently undergoing a significant restructuring, announced in March, originally designed to lead to the division of six separate units, each with its own CEO and board of directors. However, last week, Alibaba announced a reconsideration of plans, not only for its cloud business but also for the listing of its grocery chain Freshippo, citing the necessity to “evaluate market conditions.

Alibaba was founded by Ma in 1999. He relinquished the role of chairman in 2019, approximately a year before facing scrutiny from Chinese authorities for criticizing financial regulators and banks in China. Since then, the entrepreneur has maintained a relatively low profile while retaining his status as a shareholder in Alibaba.

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