Alibaba stock falls, then recovers, after state media report

State broadcaster CCTV first reported that authorities in the city of Hangzhou, Alibabas headquarters, had taken action against an individual surnamed Ma, whose name consisted of two Chinese characters, suspected of using the internet to engage in activities endangering national security.

The broadcaster later revised the article to make clear that the individual in question had a three-character name, indicating that it was not billionaire Alibaba founder Jack Ma.

A spokesperson for Alibaba did not immediately respond to a Reuters request for comment on the media report.

Alibaba stock dropped as much as 9.4% in early trading in Hong Kong in a firmer broader market. It later pared most of its losses and was trading down 1.1% by 0310 GMT.

“Talk that a guy with the surname Ma in Hangzhou helped out an investigation triggered the panic, but as clarification came up… (it helped) calm down the market,” said Steven Leung, a sales director at brokerage UOB Kay Hian.

Shares of Alibaba and other Chinese internet companies have been under pressure in the last couple of years amid an unprecedented regulatory crackdown on the sector for violations of antimonopoly, data privacy, and other rules.

Authorities cracked down on Mas business empire after he gave a speech in Shanghai in October 2020 accusing financial watchdogs of stifling innovation.

Regulators suspended the $37 billion listing of his fintech firm Ant Group two days before its planned debut on Nov. 5, 2020, ordered that Ant be restructured and launched antitrust investigations into Mas businesses, eventually leading to a record $2.75 billion fine for Alibaba in April 2021.