Alibaba shares soar 8% despite being slapped with record $2.8bn fine

Alibaba has seen its shares jump nearly eight per cent this morning despite it being slapped with a record $2.8 billion antitrust fine by Chinese regulators.

Alibaba, which has been at the centre of a significant crackdown on big tech in China since October 2020, assured investors that the fine would have no material impact on the company.

It has seemingly had the opposite effect, signifying the end of an antitrust probe into Alibaba which has created uncertainty for investors for months.

“Now the penalty is determined, the market’s uncertainty about Alibaba will be reduced,” Everbright Sun Hung Kai analyst Kenny Ng said.

Its stock rose by 7.8 per cent in afternoon trading in Hong Kong, seeing Alibaba’s market value jump by $48.5 billion marking its biggest single-day gain in nearly three months.

Though Alibaba is no longer under investigation by Chinese regulators, it is still required to comply with a “comprehensive rectification” programme which will see it spend “billions of dollars” to improve.

READ MORE: Alibaba posts 37% growth but concerns remain over growing government crackdown

One of the key focuses of the retailer’s anti-trust investigation was its practice of requiring merchants to list exclusively on its platform.

Beijing has ordered an end to this practice, which was again brushed off by its chief executive Daniel Zhang who said: “We don’t need exclusivity arrangements to retain our merchants”.

The Chinese ecommerce giant has been accused of flouting monopoly rules by antitrust regulators, who have been turning the screws on Alibaba since last year.

Jack Ma, Alibaba’s founder and until recently China’s richest man, made a “fiercely critical” speech about China’s regulatory system in October, painting a target on Alibaba’s back.

This instigated a firm and near immediate retaliation from the government which has launched investigations, fines and clampdowns on Ma’s numerous businesses, causing Alibaba’s shares to drop more than 25 per cent since October wiping more than $10 billion off of its market value.

Regulators have told Alibaba to disassociate itself from Ma or face staggering fines.

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