HONG KONG -- An ambiguous news report that sparked a fall in the shares of Alibaba Group Holding became the subject of intense speculation in China on Wednesday.
"The earliest report by CCTV News wiped out tens of billions of Hong Kong dollars' worth of market value from Alibaba's Hong Kong stock," a Shanghai resident said on the Weibo social network. "Is CCTV News suspected of interfering with market order?"
The controversy centers on a brief news item published by state broadcaster CCTV on its news app around 9 a.m. on Tuesday, indicating that a man named Ma had been detained in the city of Hangzhou for suspected subversive activities. The initial report implied the man's full name was made up of two Chinese characters.
Hangzhou is perhaps best known as the global headquarters of Alibaba. The company was founded by Jack Ma, whose two-character Chinese name is Ma Yun.
Ma and his corporate empire have been under heavy pressure from the authorities since a speech in October 2020 in which he attacked the country's financial regulators and financial system as outdated. The crackdown has seen Alibaba hit with more than 18 billion yuan ($2.7 billion) in fines and driven down the valuation of its Ant Group affiliate by 75%. Ma, 57, himself disappeared from public view for months after the speech.
More recently, anti-corruption agencies have been probing Hangzhou officials. Zhou Jiangyong, a former head of the Communist Party branch in the city whose brother has been linked to dealings with Ma's Ant Group, was expelled from the party in January.
Against this backdrop, Tuesday's CCTV report sparked a swift sell-off in Alibaba shares as it was republished by other Chinese-language media even though Ma no longer holds an official position at the e-commerce company. In the first few minutes of trading, Alibaba's stock tumbled 9.4% in Hong Kong in heavy trading, erasing HK$208.2 billion ($26.53 billion) in market value.
Most of the fall was soon erased when CCTV published an updated version of its story indicating that the suspect's Chinese name was actually made up of three characters.
Global Times, an affiliate of the People's Daily, added that the suspect, 37, was the director of hardware research and development at an information technology company.
"Ma created an online anonymous group to play a role as agent of outside forces, spread rumors and disinformation and release so-called independence declarations to split the country and subvert the state," the tabloid said.
A Weibo user in Chongqing posted Wednesday, "I believe that CCTV would not make such a mistake in name." Added another in Shanghai, "It is not clear why CCTV did this. ... There are lots of people surnamed Ma in China."
A person close to CCTV said that security officials in Hangzhou provided the Ma arrest news directly to the broadcaster's headquarters rather than to its local bureau as would normally be done.
"The unprecedented publicity given to Ma's case was a deliberate move to intimidate those who may endanger national security in any way," said former Tsinghua University politics lecturer Wu Qiang. "Using all means available to amplify a small case indicates Beijing's intention to prioritize national security by creating an atmosphere of fear for everyone."
"The capital market is now on a razor's edge after two years' clampdown on the private sector," added Wu, now an independent analyst. "Any straw in the wind can cause big fluctuations in the stock market."
Chinese internet stocks have been especially volatile in recent months as Beijing's regulatory crackdown has expanded to touch on many of the industry's major players, including Tencent Holdings, Meituan and Baidu. Reports last Friday indicating that the government had decided to wind up the effort touched off a strong rally that saw Alibaba's shares climb 13.9% to HK$102.10.
The stock fell 3.7% on Wednesday to HK$96.55, adding to Tuesday's 1.8% slide.
