Alibaba’s shares increased by 5.5% to close at $240 yesterday, following a CNBC news revealing Alibaba’s founder Jack Ma is reportedly lying low and not missing.
CNBC’s David Faber reported earlier that contrary to the previous speculation that Jack Ma is missing, he is just less visible purposely.
Alibaba facing intense regulation
After some reports emerged on Monday that Ma has not been seen publicly for over two months, Alibaba’s stock fell by 3%.
The increased regulation is coming a few weeks after Ma criticized the country’s financial regulatory system.
But on Tuesday after Faber’s report, the company’s stock covered its previous dip by rising by 5%.
“He’s not missing,” Faber reiterated. He added that Ma could be in Alibaba’s headquarters Hangzhou to remain less visible on purpose.
In November, the Alibaba Ant Group planned an IPO, but it was suspended after the Chinese regulatory authorities increased their watch on the fintech giant. As it stands, the firm is facing new regulatory challenges that could affect its business model.
Alibaba is also under the radar of regulatory authorities and is currently being investigated for antitrust violations.
Issues with Chinese financial authorities
At the Shanghai conference, Ma said the Chinese financial global regulatory approach is outdated and needs to adapt to the present demands.
According to him, “we can’t use yesterday’s methods to regulate the future.”
With the intense scrutiny of his company coming afterward, many observers feel the Chinese regulatory authorities want to bite back after Ma’s criticism of their regulatory approach.
News outlets such as The Wall Street Journal also reported this week that the Alibaba founder has not appeared in public after his criticism of the Chinese regulatory authorities.
Before then, stock exchanges in both Hong Kong and Shanghai suspended Ant Group’s record-setting IPO. Shortly afterward, regulators in China summoned and interviewed Ma and some of the Group’s executives concerning the company’s regulatory issues.
Although the company’s stock is valued way below its 52-week high of $319, the encouraging news about Jack Ma’s whereabouts may have settled investors’ minds, which is good for the share price.
The projected sales growth for Alibaba for the present quarter has been put at 63% and 67% for the next quarter.