Alibaba ( NYSE: BABA ) shares fell as much as 5% Thursday in the wake of a report that company founder and Chinese e-commerce magnate Jack Ma will give up his control of Alibaba ( BABA ) affiliate company Ant Group.
According to the Wall Street Journal , Ma will step away from Ant, a financial technology services provider that has strong ties to Alibaba ( BABA ), in order to reduce regulatory pressure that Beijing has been applying on the billionaire for more than a year. Ma owns about 10% of Ant Group, himself, and controls more than 50% of the company's shares through various other entities.
Ant was going to go public in 2020 in an IPO that was estimate to be worth $34B, but Chinese authorizes pulled the plug on the offering, and have since been forcing the company to reorganize itself as a financial services provider as opposed to a pure technology company.
Like many Chinese tech companies, Alibaba ( BABA ) has been under intense pressure from government regulators for nearly two years as Beijing has sought to exert more control over China's seemingly freewheeling tech sector. At issue in most cases have been company's adhering to China's regulatory laws and concerns over how many companies manage and secure the data of their customers.
For his part Ma has stayed mostly quiet for the better part of a year, which is a reversal from what had been his historically outspoken manner of talking about business and to the media.
As Alibaba ( BABA ) shares fell, other leading Chinese tech companies were also in the red. Weibo ( WB ) gave up 2%, Baidu ( BIDU ) pulled back by 1%, Tencent Holdings was off by almost 2%, Pinduoduo ( PDD ) slumped more than 7% and NetEase ( NTES ) dipped by less than 1%.
The KraneShares CSI China Internet ETF ( KWEB ) was also down by almost 3%.
Wall Street analysts currently hold a strong buy consensus rating on Alibaba ( BABA ) shares, while Seeking Alpha authors have a buy rating on the company's stock. Seeking Alpha's quant system, which regularly outperforms the market , has a hold rating on Alibaba's ( BABA ) stock.
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Chinese tech stocks slip as Wall Street assess Jack Ma's Ant Group plans