Alibaba co-founder Jack Ma. Image by CNN
Jack Ma rescinds his plans to sell Alibaba shares.
After the Chinese digital giant’s price fell sharply last week, Jack Ma decided to delay his plans to sell hundreds of millions of dollars’ worth of Alibaba shares.
According to two regulatory filings made on Thursday, Ma had planned to sell 10 million shares, or around $871 million.
Jane Jiang Fang, the Chief People Officer of Alibaba, disclosed in a post on the firm’s internal forum on Wednesday that Ma has not closed any deals because the stock price of the company has not reached his expectations, according to report reported.
According to the regulatory documents, the sales were originally planned to take place this Tuesday through JC Properties and JSP Investment, two businesses connected to Ma and his charitable foundation.
The revelation of the planned stock sales coincided with Alibaba’s third-quarter earnings report, during which the company announced the abandonment of its cloud computing arm spin-off, citing uncertainties stemming from US controls on chip exports to China.
Following these announcements, Alibaba’s stock experienced a 9% drop in New York on Thursday and nearly a 10% decline in Hong Kong on Friday, resulting in a roughly $20 billion reduction in the company’s market value.
Year-to-date, Alibaba’s shares have fallen by more than 10%.
Jane Jiang Fang clarified that the simultaneous release of both pieces of news was purely coincidental, dispelling rumors that Jack Ma had lost confidence in the company.
She emphasized that the planned stock transactions were part of a long-term strategy outlined in August, aiming to enable Ma’s office to invest in agricultural technology and welfare projects both within and outside China.
Fang stated that Jack Ma believes Alibaba’s stock is currently undervalued compared to its actual worth, and he has no intention to sell it.
Alibaba Chairman Joe Tsai echoed this sentiment, expressing “full confidence” in the company in a comment on the same forum post seen.
Despite plans for “a partial sell-down,” Ma’s office told the South China Morning Post, an Alibaba-owned newspaper in Hong Kong, on Friday that he was still “very positive” about the company’s prospects.
As of now, there has been no response from Jack Ma’s foundation or Alibaba regarding inquiries about the matter, including whether the planned share sale would proceed if the company’s stock price were to rebound.
The group is currently undergoing a significant restructuring, initially announced in March, which aimed to split into six separate units, each with its own CEO and board of directors.
However, last week, Alibaba announced a reconsideration 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, who founded Alibaba in 1999, stepped down as the company’s chairman in 2019, approximately a year before facing scrutiny from Chinese authorities for his criticism of Chinese financial regulators and banks.
Since then, Ma has maintained a relatively low profile while retaining his status as an Alibaba shareholder.