Global investors flee from Chinese tech stocks after the government crackdown on Ant and Alibaba – TechCrunch

Global investors are running from Chinese tech stocks in the wake of the government’s breakup on the Ant Group and Alibaba, two high-flying businesses founded by Ma Yun (Jack Ma) that were once seen as paradigms of China’s new tech elite .

The shares of the country’s major technology companies have declined sharply in recent times, With Bloomberg Calculation Alibaba, Tencent, and Maituan have lost nearly $ 200 billion in value during a handful of trading sessions.

Already reeling Last minute halt Ant Group’s public debut, a major Chinese fintech player with deep ties to Alibaba, e-commerce giant comes under fire as new China markets are under watch Opened an inquiry Presumably in its business practices related to antichromatic behavior.

The ant group was summoned by the government on 26 December, which formulated a plan. Will force the company to “improve” its business practices.

Alibaba shares are nearly 30% off their recent record highs set at the end of October. Tech shares are also closed in the country Chinese-Technology-Focused ETC Falling about 8% from recent highs, including a 1.5% drop today.

US depository receipts used by traders to invest in Alibaba fell from about $ 256 a share in Wednesday trading on the New York Stock Exchange to around $ 222 last Thursday. The company is down another half point today. Its price was higher than $ 319 per share in the previous quarter.

It is clear that rising tensions between China’s tech giants and the country’s ruling Communist Party have shaken investors. But Jack Ma’s relationship with the Chinese government Has always been a little frightening Than his peers. Ma Huateng (Pony Ma), founder of Tencent, and Baidu co-founders Xu Yong (Eric Yong) and Li Yanhong (Robin Li) have lower profiles than the Alibaba founder.

Bloomberg Now is a good summary of the market situation. The companies that fall most directly into the crosshairs are Ma Yun’s, but at different times, Chinese regulators have been focused on curbing the company’s influence through Tencent Gaming.

Alibaba in particular has gone from bad to bad and bad for things, and A. Stock buyback program promoted It was not enough to stop the bleeding.

Whether this new round of regulations is on the radar in seclusion or a growing interest in Beijing to tie tech companies closer to national interests is seen. As the tit-for-tat technical conflict between the US and China continues, many companies who saw their development as political may be implicated in diplomatic shootings.

Other tech companies are seeing their fortunes boosted by new interest from the central government in Beijing.

This is already evident in the chip industry where China’s pressure for self-reliance has brought new wealth and capital to new businesses. This is true for Liu Fengfeng, whose company, Tingshon, was able to raise $ 5 million for its effort to build a new semiconductor manufacturer in the country. IntelliFusion, the manufacturer of chipsets, focused on machine learning applications, Was able to raise another $ 141 million back in April.

Private investors may be less excited at the prospect of support for Chinese tech upstarts that may face government censors that should shift regulatory winds. Whether the region’s other startup markets – India, Japan, among others – will benefit from the Chinese regulatory barrage will be interesting to track in 2021.