Alibaba Group Holding Ltd (BABA) – Get Report shares traded higher Tuesday amid reports that the co-founder of Asia’s most valuable tech company, Jack Ma, is not missing after allegedly falling out of favor with China’s leadership.
Ma, who hasn’t been seen, nor made public comments, since November, drew the ire of President Xi Jinping with a speech in October that attacked the government’s role in blunting creativity and innovation in the tech sector. Since then, government officials have launched an anti-trust investigation in Alibaba, the internet giant he co-founded in 1999, and squashed the IPO plans of its online banking subsidiary, Ant Group.
CNBC’s David Faber, however, reported Tuesday that Ma is not “missing”, in the sense that his location is unknown, but is rather “lying low” in terms of his public appearances in the hope that he can ride-out the current government backlash.
“He’s not missing,” Faber said. “I haven’t seen Jack Ma in quite some time, but I have interviewed him many times, but what I can tell you is that he’s very likely in Hangzhou, where Alibaba is headquartered, and is being less-visible, purposefully … but that doesn’t mean that he’s missing.
“He hasn’t been captured, he hasn’t been taken and there’s no expectation that the government is going to move on him in some way,” Faber said.
Alibaba’s U.S.-listed shares rose 5.5% over the Tuesday session to close at $240.40 each following Faber’s comments, which he attributed to a source close to Ma.
China’s State Administration for Market Regulation launched its probe into Alibaba on Christmas Eve, and demanded a meeting with officials from its affiliate Ant Group Co., amid a broader push to tackle anticompetitive practices in internet commerce, including the alleged pressuring of merchants to list their goods on a single online platform.
The investigation follows last month’s dramatic suspension of the planned $37 billion IPO of Ant Group and the summoning of billionaire Ma by government officials, as well as the People’s Bank of China, to “provide views regarding the health and stability of the financial sector.”
Alibaba shares were also supported Tuesday by the New York Stock Exchange’s decision to reverse an earlier threat to delist three China-based telecom stocks following an Executive Order from President Donald Trump that bans U.S. investment into companies with ties to the country’s military.
Trump also signed legislation last month — The Holding Foreign Companies Accountable Act — that could remove China-based companies from U.S. stock exchanges if they don’t comply with American auditing standards.