Alibaba loses $344bn in a year amid China crackdown

BEIJING: Chinese internet giant Alibaba has lost $344.4 billion in market capitalisation over the past year, amid Beijing’s efforts to rein in the country’s massive tech sector to stop monopolistic practices.

The company’s shares collapsed gradually but steadily throughout the year. After reaching an all-time high of $317.14 per share in October 2020, they hit a historic low of $139.63 per share on October 4, 2021. Although they have shown a slight growth in the past week, they are still 44% below their 2020 peak, RT reported.

The sharp collapse began last year, when regulators suspended the planned IPO of Alibaba’s technology subsidiary Ant Group, which was set to become the largest in the history of the entire stock market. In addition, an antitrust investigation was launched against the tech giant, as a result of which the company was fined a record $2.8 billion. Beijing then tightened its control over the firm’s activities and demanded it reorganize its fintech business.

Shortly afterwards, the authorities began to tighten their grip on other sectors as well, which led to the fall of many Chinese stocks. For instance, in an effort intended to prevent student burnout, tutoring companies were banned from expanding their operations by attracting private and foreign capital, or launching IPOs. Beijing also issued regulations and investigated firms involved in video gaming; biotech, IT, and the manufacture of semiconductors, electronic cigarettes, alcohol and baby food.

Article continues after this advertisement

In August this year, the Chinese government published a 2021-25 development plan, calling for tighter regulation of vast sectors of the economy. It is planning broad legislative changes in areas such as security, technology, personal data and antitrust regulation.

Alibaba’s capitalisation loss sets a record among all companies trading across the world, according to Bloomberg’s calculations.

- Advertisement -

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisement -

Must Read

Cabinet may approve appointment of new PPL MD in coming week

ISLAMABAD: The federal cabinet is likely to choose one of three shortlisted candidates during the coming week's scheduled meeting for the top position of...