Jack Ma Halts Alibaba Share Sale Plans Amid Stock Decline
Chinese entrepreneur Jack Ma has decided to delay the sale of hundreds of millions of dollars worth of Alibaba shares following a significant drop in the company’s stock value last week.
Regulatory filings had disclosed Ma’s intention to sell 10 million shares, valued at almost $871 million. However, due to Alibaba’s stock price falling below Ma’s expectations, not a single share has been sold, according to a Wednesday post by Alibaba Chief People Officer Jane Jiang Fang on the company’s internal forum, as reported by CNN.
The initial plan was for the sales to occur on Tuesday through entities JC Properties and JSP Investment, both associated with Ma and his philanthropic foundation, according to the regulatory filings.
This revelation coincided with Alibaba’s third-quarter earnings report, where it announced the abandonment of plans to spin off its cloud computing arm, citing uncertainties caused by US controls on chip exports to China. Following these announcements, Alibaba’s stock experienced a 9% decline in New York on Thursday and nearly 10% in Hong Kong on Friday, resulting in a $20 billion reduction in the company’s market value.
Year-to-date, Alibaba’s shares have witnessed a decrease of more than 10%. Jiang clarified that the timing of both pieces of news was coincidental and urged employees to dismiss rumours suggesting that Ma had lost confidence in the company. She explained that the transactions were part of a long-term plan outlined in August, allowing Ma’s office to invest in agricultural technology and welfare projects globally.
According to Jiang, Ma believes that Alibaba’s stock is currently undervalued, and he has no intention to sell it. Alibaba Chairman Joe Tsai expressed full confidence in the company in a comment on the same post.
While rumours circulated about Ma’s confidence in Alibaba, his office stated to the South China Morning Post that he remains optimistic about the company’s prospects, despite considering a “partial sell-down.” Requests for comments on whether the share sale would proceed if the stock price rebounded were not immediately addressed by Ma’s foundation or Alibaba.
Alibaba is currently undergoing a major restructuring announced in March, initially intended to result in the division of six separate units. Last week, the company reconsidered plans not only for its cloud business but also for the listing of its grocery chain Freshippo, citing a need to “evaluate market conditions.” Jack Ma founded Alibaba in 1999, stepping down as chairman in 2019 but remaining a shareholder.
