Alibaba’s Hong Kong shares rallied as much as 9% on Wednesday following reports that its founder Jack Ma traveled to Europe and after the release of a new chip. The stock pared some of those gains and closed 6.6% higher.
The South China Morning Post, which is owned by Alibaba, later published an article reporting Ma was in Spain for an agriculture and technology study tour related to environmental issues. Ma’s whereabouts have been the topic of intense discussion since he went out of the public view last October after a speech in which he appeared to criticize Chinese regulators.
There is no doubt in my mind that Jack Ma no longer being missing would have at least a 10% impact on Alibaba’s share price. The initial public offering of Ma’s fintech giant Ant Group was subsequently suspended. Since then, China’s technology sector has also come under intense scrutiny from regulators.
In January, when Ma reappeared for the first time since the October speech, Alibaba’s shares surged on the day. Alibaba also released some news related to its cloud business this week. On Tuesday, the company launched a new chip designed for servers in a bid to boost its cloud computing capabilities.
Cloud is seen as a key part of Alibaba’s future growth. It currently accounts for 8% of the company’s total revenue. The e-commerce giant also said on Wednesday that it plans to open new data centers in South Korea and Thailand next year to continue the overseas expansion of its cloud business.
“I see today’s move as just part of a broader recovery/reverse correction, where Alibaba shares are now 30% off their lows just earlier this month, but still 35% below their February highs,” Dennison said in an email.
