Amid Beijing's continued regulatory crackdown, tech giant Alibaba's shares plunged to nearly 11 per cent on Friday after the company warned of weaker growth this year as China's economy slows.
Alibaba (BABA) dropped 10.7 per cent, the steepest decline since its listing in the city in November 2019. The fall in Hong Kong followed a similar plunge on Thursday in its share price on Wall Street after the company reported disappointing quarterly earnings and warned that results for the year will miss analysts' estimates, reported CNN.
So far this year, Alibaba's stock has dropped 40 per cent, wiping about USD 234 billion from the value of the company. Friday's plunge dragged down Hong Kong's benchmark Hang Seng Index (HSI), which fell 1.1 per cent.
Alibaba, founded in 1999 by Jack Ma, faces enormous political and regulatory pressure from Beijing, which has intensified a crackdown on the internet industry since late last year.
Beijing has become increasingly concerned about the clout that big, private tech firms have over media, finance, data, and other sensitive sectors, and how entrenched they have become to everyday life in China through news, digital payments apps and other services, reported CNN.
Alibaba and fellow Chinese tech giants Tencent (TCEHY), Baidu (BIDU) and TikTok owner ByteDance have been subject to increased regulatory scrutiny from the Chinese government in the past year.
Last November, regulators shelved a highly anticipated IPO by Alibaba's financial affiliate, Ant Group. Beijing yanked the IPO for Alibaba's Ant Group affiliate, which owns payment app giant Alipay.
In December, President Xi Jinping said that stronger anti-monopoly rules against internet firms would be one of his most important goals for 2021. Days later, regulators announced an antitrust investigation into Alibaba.
In April, Alibaba was fined a record USD 2.8 billion by the anti-trust watchdog. Ant Group was also cut down to size and ordered by the banking regulators to overhaul its operations, reported CNN.
( With inputs from ANI )
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