Shares of tech giant Alibaba continued to fall on Friday, adding to the stock’s massive selloff after the company said earlier this week that it expects weaker revenue growth amid China’s slowing economy and Beijing’s ongoing regulatory crackdown.
The tech and e-commerce giant reported disappointing quarterly earnings late on Wednesday and slashed its revenue forecasts for the year ahead.
Alibaba shares plunged over 11% on Thursday following the report—one of the stock’s largest single-day declines on record—and is down more than 2% so far on Friday.
The stock\’s downward trajectory has shaved billions off of the net worth of Alibaba founder and chairman, Jack Ma, who was once China’s richest person.
Ma’s fortune fell by another $350 million on Friday, bringing his net worth to $38.6 billion, according to Forbes’ estimates.
The billionaire’s wealth is down dramatically from its peak: Ma was worth as much as $66.6 billion when Alibaba’s stock price hit a record high of around $317 per share on October 27, 2020.
It has been a difficult year for the Chinese billionaire, who is also the cofounder of fintech giant Ant Group: Ma has largely kept a low public profile since Beijing’s regulatory crackdown heated up last year.
Since last year, the Chinese government has ramped up its regulatory scrutiny of major tech giants in the country—including Alibaba and its peers Tencent, Baidu and TikTok owner ByteDance, accusing them of anticompetitive practices and gathering large amounts of private user data. Billionaire Jack Ma briefly disappeared from public view after Chinese regulators shut down his fintech company Ant Group’s planned $35 billion IPO in November 2020. Government regulators then fined Alibaba $2.8 billion in April 2021—the highest-ever antitrust penalty imposed in China—for acting like a monopoly. Shares of Alibaba are down nearly 40% so far this year.
What To Watch For:
In its earnings release, the tech giant warned of a “regulatory environment that [could] affect Alibaba’s business operations” as well as “privacy and data protection regulations and concerns.”
Chinese president Xi Jinping “has not backed down” when it comes to the regulatory crackdown, John Freeman, vice president of equity research at CFRA, recently told Yahoo Finance. “There’s actually a delisting risk” when it comes to Alibaba shares, he warns.
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