Alibaba was China's most valuable company throughout most of 2020, and planned to finish the year with a bang by rolling out its much anticipated Ant Financial IPO. Then Chinese regulators stepped in.
In a crushing blow to both companies, China's top commerce regulator announced an investigation into Alibaba's business practices, alleging the company may be abusing its dominant market position for monopolistic purposes. A few days later, the Chinese central bank (the PBOC) issued a statement criticizing Ant Financial's business practices, ordering the company to focus on its less-lucrative digital-payments business. Alibaba owns one-third of Ant, and both were founded by Jack Ma.
When brings me to the next part of this story - whether China's actions against Alibaba and Ant were tied to the government's disapproval of Jack Ma's recent statements criticizing China's oversight of businesses. Retaliation seems a likely motive for the punitive measures against Alibaba, and Nomura research analysts note that China may also be using Alibaba's case to send a warning shot to other dominant technology companies acting anticompetitively.
Alibaba's shares have plummeted on the news, erasing nearly all of its stock market gains for 2020. It's U.S. counterparts are most closely Amazon and PayPal, and Tickeron's Artificial Intelligence analyzes all three below.