Chinese officials want to reduce his technology and financial empire, including Ant Group, a financial payment/technology concern, which is 33% owned by Internet giant Alibaba, knowledgeable Chinese officials and government advisers told The Wall Street Journal.
They said the government may grab ownership of a bigger part of his businesses.
After Ma made comments critical of China’s regime last month, the government scuttled Ant’s IPO.
Alibaba shares recently traded at $236.03, up 6.2%. They've gained just 11% year to date, thanks to the government’s pressure on Ma.
Baird analyst Colin Sebastian cut his price target on Alibaba to $285 from $325, affirming his outperform rating, amid the government probe. It’s “very hard to predict the outcome” of the investigation, Sebastian wrote in a commentary.
The crackdown on Alibaba and Ant should help the U.S. technology sector, says analyst Daniel Ives at Wedbush. “The Ant Financial IPO delay and further regulatory crackdown is a major black eye for the Chinese tech sector,” he said.
The “dynamics will yet again bode well for U.S. tech stocks as the favorable backdrop creates a nirvana set-up for FAANG and the overall U.S. tech sector into 2021,” Ives said. FAANG is the group of major tech companies including Facebook (FB) - Get Meta Platforms Inc. Class A Report, Amazon (AMZN) - Get Amazon.com, Inc. Report, Apple (AAPL) - Get Apple Inc. Report, Netflix (NFLX) - Get Netflix, Inc. Report and Google/Alphabet (GOOGL) - Get Alphabet Inc. Class A Report.