Jack Ma's speech costs Alibaba shareholders $344 billion: Reports

Alibaba (Source: Reuters)

Chinese billionaire Jack Ma-founded Alibaba Group Holdings lost a whopping $344 billion in market capitalisation post Beijing's crackdown, reported Bloomberg on October 26. The firm's market capital stood at $480.8 billion as on Tuesday.

This is the biggest wipe out of shareholder value globally in big tech firms in past one year. Chinese authorities had suspended Alibaba's fintech arm Ant Group's planned listing in October 2020, following Jack Ma's speech at the Bund Summit in Shanghai -- made last October 2020 -- criticising global financial regulations for stifling innovation and urging China to seek a system that accommodated development.

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"After the Asian financial crisis, the risk control highlighted in the Basel Accords has been the priority for regulators. Now the world only focuses on risk control, not on development, and rarely do they consider opportunities for young people and developing countries," Bloomberg quoted Ma as saying.

Following Jack Ma's speech, the Chinese authorities initiated a widespread crackdown on the country’s most vibrant sectors, which resulted in Chinese stocks tanking. Beijing not only stepped up its scrutiny of the firm's practices, but also ordered Ant to undergo restructuring as a condition for reviving its IPO of its fintech business.

According to data compiled by Bloomberg, despite a recovery from October 5, Alibaba Group Holdings' stock is still 43 percent lower than its October 2020 peak.

Other firms that lost a significant share of their market-cap include -- Khaishou Technology ($104 billion), Ping An Insurance Group Co of China Ltd ($66.1 billion), Tencent Holdings Ltd ($65.4 billion), Zoom Video Communications Inc ($63 billion), China Life Insurance Co Ltd ($50.8 billion), Ke Holdings Inc ($50.3 billion), SoftBank Group Corp ($40.9 billion), Tal Education Group ($39.1 billion) and RLX Technologies Inc ($36.7 billion).

Now with reports of the 57-year-old businessman's presence in Spain -- for a "study tour of the agricultural industry and technology related to the environment", the news sent Alibaba's shares soaring, closing 6.67 percent higher in Hong Kong on Tuesday.

How much is $344 billion?

Equating the numbers with the Gross domestic product (GDP) of Asian countries, Bangladesh's GDP comes closer to this amount at $356 billion, while nations like Philippines ($386 billion), Singapore ($379 billion), Malaysia ($371 billion) and Vietnam ($368 billion) inch a little higher in GDP terms. When compared with India, Alibaba's loss amounts to one-tenth the size of total Indian market cap.

With inputs from Agencies.