Alibaba Group Holding Ltd led a second day of frantic sales among China’s largest tech firms, fueled by fears that antitrust control could spread beyond Jack Ma’s internet empire and devour the most powerful corporations in the country

Alibaba and its three largest competitors – Tencent Holdings Ltd, Grocery supplier Meituan and JDcom Inc – have lost nearly $ 200 billion in Hong Kong in the two sessions since Thursday, when regulators revealed an investigation into suspected monopoly practices at Ma’s Signature Company, which marked the formal start of the Communist Party’s crackdown on not only Alibaba, but possibly also against the broader and increasingly influential technology

“It’s very difficult to predict the outcome of the Chinese government’s ongoing investigation into Alibaba and other major consumer internet platforms,” ​​Baird analyst Colin Sebastian wrote in a note as he lowered his price target on Alibabas U.S.Listed shares from $ 325 to $ 285, citing “uncertainty about government oversight and potential for direct regulatory action in the coming year”


The company’s American depository receipts fluctuated on Monday – after a historic 13% decline in the last session – as volume topped the 12-month daily average in the first half hour, reflecting doubts about what will happen next will JDcom fell 34% and Tencent fell 29% Hong Kong trade was also fierce: Alibaba fell 8% on Monday and lost $ 270 billion in value since peaking in October Tencent and Meituan both fell more than 6% / p>

KeyBanc Capital Markets wrote that this “significant” withdrawal has created an attractive buying opportunity and that no significantly different competitive landscape is expected for the company

On Sunday, the Chinese central bank ordered the other online titan from Ma – Ant Group Co – to return to its roots as a payment service provider and overtake neighboring companies from insurance to money management, which spurs talk of a possible separation

Alibaba and its compatriots, once hailed as the agents of China’s economic and technological advancement, are now facing increasing pressure from regulators to worry about the speed at which they are influencing sensitive areas such as media and education Gaining and influencing the daily lives of hundreds of millions that concern emerged in November when regulators torpedoed the $ 35 billion Ant initial public offering before unveiling draft rules giving extensive containment powers anti-competitive practices were anchored in sectors from e-commerce to social media

“The Chinese government is pushing or wanting more control over the technology companies,” said Jackson Wong, director of asset management at Amber Hill Capital Ltd., said over the phone, “Companies like Alibaba, Tencent and Meituan are still under a lot of pressure to sell. These companies have grown and scaled too fast at a rate that Beijing considers too fast”

It is unclear which concession regulators could try to wrestle Alibaba under the existing antitrust law, which is currently being revised to include the internet industry for the first time, Beijing can punish violators with up to 10% of its revenue, in Alibaba’s case that could be a levy of up to to 7 USD means 8 billion

China’s leading e-commerce company on Monday raised a proposed share buyback program by $ 4 billion to $ 10 billion, which will run for two years until the end of 2022, but the buyback program has been overwhelmed by fears that moves against Ant will only be the Tip of the Iceberg While the central bank stopped calling for a split, the financial services giant must now come up with specific measures and a timeline for its business overhaul

The state administration of market regulation dispatched officials to Alibaba headquarters in Hangzhou last Thursday, and the on-site investigation was concluded that day, according to local news reports The People’s Daily – the mouthpiece of the Communist Party – made a comment over the weekend, in which she warned colleagues at Alibaba not to use Alibaba’s antitrust investigation to raise their own awareness of fair competition

Ma, the flamboyant co-founder of Alibaba and Ant, has almost disappeared from the public eye since Ant’s IPO derailed in early December, the man most closely identified with the meteoric rise of China Inc was advised by the government to stay in the country, a person familiar with the matter said

Ma is not facing personal downfall, those familiar with the situation have said. His very public reprimand is instead a warning that Beijing has lost patience with the overwhelming power of its technology moguls, which are increasingly posing a political and financial threat Stability are considered the most awarded to President Xi Jinping

Investors continue to disagree over the extent to which Beijing will persecute Alibaba and its compatriots as Beijing prepares for the introduction of the new anti-monopoly rules The country’s leaders have said little about how tough they are going to contain, or why they decided to act now

Some analysts predict tough crackdowns are ahead, but a targeted one is referring to the language in the regulations that suggest a strong focus on online trading, from enforced exclusive agreements with traders known as “Pick One of Two “are known, up to algorithmic prices favored by new users. The regulations explicitly warn against predatory prices – which are sold below cost – to weed out competitors.”

“With this latest investigation coming at a time when China is ready to crack down on monopoly practices, SAMR believes the BABA case should serve as a precedent to send a message to the rest of the industry that the Authority is determined this time to address the price problem, the Nomura analysts wrote in a note on Monday

Alibaba Stock

World News – CA – Alibaba probe raises global concern about next steps for Chinese Tech

Source: https://www.bloomberg.com/news/articles/2020-12-28/alibaba-hikes-share-buyback-plan-to-10-billion-from-6-billion