Jack Ma Hits Pause on Massive Alibaba Share Sale


Jack Ma Hits Pause on Massive Alibaba Share Sale
© Getty Images News/Lintao Zhang

Jack Ma, the prominent Chinese businessman, has halted plans to sell a substantial number of Alibaba shares. This decision follows a steep decline in Alibaba's stock value last week. Regulatory filings from last Thursday disclosed Ma's intention to offload 10 million shares, valued at nearly $871 million.

However, a recent plunge in the company’s stock price, falling below Ma's expectations, led to a change of course, with Ma refraining from selling "a single share," as Alibaba Chief People Officer Jane Jiang Fang revealed in a company forum post.

The planned sales were set to occur through JC Properties and JSP Investment, two entities associated with Ma and his philanthropic foundation. This announcement coincided with Alibaba's third-quarter earnings report and the company's decision to halt plans to spin off its cloud computing arm, partly due to uncertainties arising from US restrictions on chip exports to China.

Impact and Speculation

The news of the potential sale, combined with Alibaba's earnings report, had a significant impact on the company's market value. Alibaba's stock plunged 9% in New York on Thursday and nearly 10% in Hong Kong on Friday, erasing approximately $20 billion from its market capitalization.

So far this year, Alibaba’s shares have seen a decline of more than 10%. Jiang addressed the timing of these events, labeling it a mere "coincidence" and dispelling rumors that Ma had lost confidence in the company. She emphasized that the proposed transactions were part of a long-term plan initiated in August, aimed at funding investments in agricultural technology and welfare projects in and outside China.

Despite the current stock valuation, Ma maintains a positive outlook on Alibaba, believing that the company's stock is "significantly lower than Alibaba’s actual value," and thus, he is not inclined to sell. Alibaba Chairman Joe Tsai echoed this sentiment, expressing "full confidence" in the company.

As Alibaba navigates through these challenges, including its major restructuring announced in March, the company remains cautious. Last week, Alibaba indicated a reconsideration of not just its cloud business plans, but also the listing of its grocery chain Freshippo, citing the need to "evaluate market conditions." Ma's office, speaking to the South China Morning Post, maintained a positive stance on Alibaba's prospects, despite acknowledging plans for "a partial sell-down." The company is yet to comment on whether the share sale might proceed if Alibaba's stock price sees a rebound.