Finally some positive news for Alibaba Group (NYSE: BABA; HKEX: 09988) in what has been a disappointing last couple of months of trading. Shares of Alibaba were trading 5% higher intraday Tuesday after co-founder Jack Ma has apparently not gone missing after all.
CNBC’s David Faber reported Tuesday, citing a person familiar with the situation that Ma has been “lying low” and is not “missing,” as Alibaba has been facing intense regulatory heat from Beijing. Just last week, Alibaba was slapped with a second fine at the maximum amount of 500,000 yuan from the State Administration for Market Regulation.
Faber said, as cited by the Street, "I haven't seen Jack Ma in quite some time, but I have interviewed him many times, but what I can tell you is that he's very likely in Hangzhou, where Alibaba is headquartered and is being less-visible, purposefully ... but that doesn't mean that he's missing,”
He added, "He hasn't been captured, he hasn't been taken and there's no expectation that the government is going to move on him in some way."
Speculation surrounding Ma rose after he didn’t show up at the finale of his talent show, Africa’s Business Heroes. He has not made a public appearance in over two months, causing many in the media to question where he is.
In addition to Alibaba, the Chinese billionaire has also been dealing with regulatory scrutiny regarding his fintech company Ant Group. The fintech giant, majority-controlled by Ma with Alibaba holding a 33% stake, has had its record-breaking IPO suspended indefinitely that was slated to occur simultaneously in Hong Kong and on the STAR market in Shanghai.
Now, Beijing is urging Ant to come up with a plan to rectify its business to comply with regulatory mandates.
Last month, President Donald Trump signed legislation into law that could delist Chinese firms from U.S. bourses that refuse to comply with auditing standards.
Importantly, Chinese firms have three years to comply, which is plenty of time, meaning you shouldn’t have to worry about Alibaba or another tech giant with tens of billions in market capitalization potentially getting delisted for the time being.
Aibaba's stock was further helped by the New York Stock Exchange's sudden reversal, opting now not to delist the three big China telecom--China Telecom, (NYSE: CHA), China Mobile Ltd. (NYSE: CHL) and China Unicom (NYSE: CHU)-- targeted by the Trump administration for thier links to the Chinese military.