Don't miss out on CNN's Meanwhile in China newsletter, delving into the impact of the country's rise on the world. Also, Jack Ma has postponed selling hundreds of millions of dollars worth of Alibaba shares following a steep drop in the company's stock last week.
Last Thursday's regulatory filings disclosed that Ma had planned to sell 10 million shares, valued at almost $871 million. However, due to the company's stock price falling below his expectations, he has not sold any shares, as stated in a post by Alibaba (BABA) Chief People Officer Jane Jiang Fang on the company's internal forum, as reported by CNN.
According to the filings, the sales originally scheduled for this Tuesday were to be conducted through JC Properties and JSP Investment, both entities associated with Ma and his charitable foundation.
Aerial view of Alibaba's Global Headquarters under construction on June 14, 2023 in Hangzhou, Zhejiang Province of China.
Long Wei/VCG/Getty Images
Alibaba cancels plan to spin off cloud business due to chip war
Alibaba disclosed its intention to sell its cloud computing arm on the same day it reported third quarter earnings. This decision was made partly due to uncertainties caused by US controls on chip exports to China.
Alibaba's stock dropped 9% in New York on Thursday and nearly 10% in Hong Kong on Friday, resulting in a loss of about $20 billion from the company's market value. Year to date, Alibaba's shares have fallen by over 10%.
Jiang dismissed the idea that both pieces of news coming at the same time was anything more than a "coincidence." Rumors sparked by the sale news suggesting that Ma had lost confidence in the company were addressed by Jiang, who encouraged employees to ignore such speculation. Jiang explained that the transactions were part of a long-term plan set out in August, allowing Ma's office to invest in agricultural technology and welfare projects, both within and outside of China.
Ma stated that the stock of the Hangzhou-based firms is currently undervalued compared to Alibaba's actual value, and she has no intention of selling it. Alibaba Chairman Joe Tsai also expressed his full confidence in the company in a comment on the same post, as reported by CNN.
Alibaba co-founder Jack Ma.
Mas office told the South China Morning Post, owned by Alibaba, on Friday that he is "very optimistic" about the company's future, despite the plans for "a partial sell-down."
Mas foundation and Alibaba have not yet responded to requests for comment regarding the matter, or if the share sale would continue if the company's stock price were to recover. Currently, the group is undergoing a significant restructuring, which was initially announced in March with the intention of dividing into six separate units, each with its own chief executive and board of directors.
Last week, Alibaba announced that it would reconsider its plans for its cloud business and the listing of its grocery chain Freshippo, stating that it needs to assess market conditions. Ma established Alibaba in 1999 and resigned as chairman in 2019. Around a year later, he faced backlash from Chinese authorities for his comments on Chinese financial regulators and banks. Despite this, Ma has maintained a relatively low profile while holding onto his shares in Alibaba.
CNNs Mengchen Zhang contributed to this report.
