Alibaba Group Holding Ltd. led a selloff in Chinese tech giants triggered by fears antitrust scrutiny will spread beyond Jack Ma’s Internet empire and ensnare more of the country’s most powerful corporations.
China’s e-commerce leader on Monday raised a proposed stock repurchase program by $4 billion to $10 billion, effective for two years through the end of 2022. The buyback program, which began this quarter, failed to stem a slump in the shares, which slid more than 5 percent in Hong Kong to a six-month low.
Once hailed as the standard-bearers of China’s economic and technological ascendancy, Alibaba and rivals like Tencent Holdings Ltd. now face increasing pressure from regulators worried about the speed with which they’re amassing hundreds of millions of users and gaining influence over almost every aspect of daily life. Alibaba has shed more than $230 billion from its peak, battered by the deepening scrutiny and allegations of monopolistic practices at the crown jewel of billionaire Jack Ma’s empire.
Shares in Tencent and Alibaba rival JD.com Inc. slid roughly 2 percent in Hong Kong, while food delivery giant Meituan tumbled more than 4 percent as investors feared the antitrust net might widen further. Affiliate Alibaba Health Information Technology Ltd. posted its biggest two-day slump since July 2015. The People’s Daily — the Communist Party mouthpiece — ran a commentary over the weekend warning Alibaba’s peers to take the antitrust investigation into Alibaba as a chance to lift their own awareness of fair competition.
“The Chinese government is putting more pressure or wants to have more control on the tech firms,” Jackson Wong, asset management director at Amber Hill Capital Ltd., said by phone. “There is still very big selling pressure on firms like Alibaba, Tencent or Meituan. These companies have been growing at a pace deemed by Beijing as too fast and have scales that are too big.”