Jack Ma disappearance prompts $497b loss for Alibaba in just one year

A year since he made a comment that angered the Chinese government, Jack Ma has barely been seen and his vast fortune is bleeding to nothing.

It has been exactly a year since Chinese businessman Jack Ma publicly criticised his communist government and since then he’s lost hundreds of billions of dollars of his vast fortune.

Over the last 12 months, his business, Alibaba — pegged as China’s version of eBay, Amazon and PayPal all rolled into one — has lost around US$373 billion (A$497 billion).

According to Bloomberg, Alibaba’s fall from grace is the single biggest financial loss a business has ever endured.

On October 24 last year, Mr Ma made a now-infamous speech at a business summit where he went viral for condemning the Chinese Communist Party (CCP).

“We shouldn’t use the way to manage a train station to regulate an airport,” Mr Ma said at the time. “We cannot regulate the future with yesterday’s means.”

His remarks came hot on the heels of a government announcement over plans to increase regulation into its financial sectors, and was perceived as a criticism.

The CCP’s wrath was swift and unforgiving. Mr Ma disappeared for months and Alibaba lost almost half its value in the space of a year.

The company’s market capitalisation slid sharply from US$850 billion just before Ma’s speech to $477 billion on Tuesday, at time of writing, according to NASDAQ.

That’s a drop of $373 billion.

Alibaba Chairman Jack Ma in 2018 when his business was flourishing. Picture: Lintao Zhang/Getty Images

The price of Alibaba’s stock was hovering around US$176 on Tuesday, as opposed to the US$306.87 a year earlier on October 26.

A number of things have caused the staggering loss in Ma’s wealth, who was once considered the richest man in China.

He is currently ranked 30th on Bloomberg’s billionaire index with an estimated net worth of US$46.1 billion, down from $60.3 billion this time last year when he was at his peak in terms of wealth.

Last year, the tech pioneer was about to launch an initial public offering worth a staggering $US37 billion ($A51 billion) for Ant Group, a spin-off of Alibaba.

An Alibaba warehouse, the Chinese equivalent of Amazon. Picture: AFP

Alibaba has been bleeding money all year.

However, after Mr Ma’s critical comments, the CCP cancelled the IPO.

Then earlier this year, the government fined Alibaba with a $US2.8 billion penalty for a breach of antitrust regulations.

He also disappeared in the wake of his remarks, believed to have been snatched by the CCP.

He was called to Beijing for a meeting, reportedly at the demand of President Xi, and wasn’t heard from again until January this year.

In an eerie 48-second video clip, shot and released by the Chinese government, Mr Ma said he wanted to devote himself to charity.

Jack Ma in the famous January 20 2021 ‘hostage’ video. Photographer: Justin Chin/Bloomberg

Mr Ma has since gone on to become the single biggest charity donor in China, with philanthropic donations totalling $US500 million ($A681 million) over the past 12 months.

Although Alibaba’s value surged by $40 billion as consumer confidence grew upon seeing him alive in January, it didn’t last long.

Many believed it was a hostage video and he has only been spotted six times since then, all under controlled circumstances.

Last week, Mr Ma was seen for the first time since May, in Spain.

The tech guru was on a yacht anchored off the Spanish island of Mallorca with other business leaders and a security detail, Reuters reported.

It was his first trip abroad since he fell out with China‘s regulators in 2020.

Alibaba Group‘s Hong Kong shares rose nearly 10 per cent following the news, with some hopeful that Mr Ma’s trip was a sign of the government dropping its grudge against him.

Jack Ma spotted alive last week. Picture: Jaime Reina/AFP

By the end of June this year, Alibaba’s market cap had dropped from US$850 billion just before Ma’s speech to US$570 billion.

Now, just four months later, that number dropped again by almost $100 billion to today’s current $477 billion.

Alibaba is set to report earnings on November 5 where it could be staring down the barrel of even bigger losses.