Billionaire Jack Ma's fortune declined $US752 million ($1.02 billion) on Wednesday after his Alibaba Group Holding dropped to the lowest level since China's biggest e-commerce operator went public in September.
Ma's net worth slid 2.4 per cent to $US31.2 billion as the company he founded declined 5.1 per cent to close at $US73.38 in New York. Alibaba's quarterly sales rose at the slowest pace in at least three years and transaction volumes missed analysts' estimates amid a weakening Chinese economy. Ma, 50, who has a 6.2 per cent stake in the company, is the world's 21st-richest person, according to the Bloomberg Billionaires Index.
Alibaba has lost more than $US71 billion of its market value this year amid a saturation in the e-commerce market in China's larger, wealthier cities. China's economy is growing at the weakest pace since 1990, and Alibaba is facing lawsuits over counterfeits. The stock has never traded below $US68 a share, the price set in September's initial public offering, which raised a record $US25 billion.
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Since its float, the company's situation has changed drastically. Alibaba is now grappling with the economic slowdown, which has been made more volatile by the devaluation this week of the country's currency. The company's new chief executive, Daniel Zhang, is seeking ways to bolster growth, such as courting international brands it believes will sell well to middle-class Chinese consumers.
At the same time, Alibaba is pushing to make its services more accessible to people in underserved rural regions, who are likely to become China's next several hundred million internet users.
Turbulence spreads
Investors who bought into Alibaba's growth promise during the roadshow are also more skeptical - and less forgiving of any stumbles, especially as turbulence in China's stock market spreads to Chinese companies listed in the United States. Before Wednesday, Alibaba, which is listed on the New York Stock Exchange, had fallen about 35 per cent from its November 2014 highs and it was just 14 per cent above the IPO price.
Alibaba's precarious position was highlighted Wednesday when the company reported its latest earnings. While revenue rose 28 per cent, that was less than investors had anticipated.
Jack Ma has said he is focused on the long term rather than on short-term stock movements. But in a move to shore the share price, the company said Wednesday that it would authorise a $US4 billion share buyback program over two years. The program is intended to help offset dilution of shares from employee compensation tied to stock.
And to signal confidence in the company, Alibaba's executive vice chairman, Joseph Tsai, said neither he nor Ma would sell their Alibaba shares.
Robert Christie, a spokesman for Alibaba, didn't respond to a call and an e-mail seeking comment on the decline in Ma's personal fortune.
Ma's net worth has declined by $US6.3 billion after reaching a high of $US37.4 billion on June 3. He is the third-richest person in Asia, trailing Wang Jianlin and Li Ka-shing, according to the index.
Bloomberg