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   Technology StocksAlibaba Group Holding Limited


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From: Glenn Petersen3/25/2021 6:26:22 AM
   of 794
 
SEC Starts Implementing Law That Risks Chinese Stock Delistings

By Benjamin Bain
Bloomberg
March 24, 2021, 11:12 AM CDT

-- Regulator takes initial step on requiring audit inspections

-- Alibaba, Baidu among firms under pressure from Washington

The threat of Chinese stocks being kicked off U.S. exchanges is gaining traction, with the Securities and Exchange Commission starting to implement a tough law passed at the end of the Trump administration.

In a Wednesday statement, the SEC said it’s taking initial steps to force accounting firms to let U.S. regulators review the financial audits of overseas companies. The penalty for non-compliance, as stipulated by the law Congress approved in December, is ejection from the New York Stock Exchange or Nasdaq for any business that doesn’t allow their audit to be inspected for three years.
China has long refused to let the U.S. Public Company Accounting Oversight Board examine audits of firms whose shares trade in America, citing national security concerns. U.S. lawmakers counter that such resistance risks exposing investors to frauds, while complaining that it makes little sense that Chinese companies have been permitted to raise money in the U.S. without complying with American rules.

The requirement that all public companies submit to PCAOB inspections of their audits was included in the 2002 Sarbanes-Oxley Act in the wake of the Enron Corp. accounting scandal. Alibaba Group Holding Ltd. and Baidu Inc. are among Chinese companies listed in the U.S. whose audit firms aren’t complying with the demand.

While the SEC was expected to start implementing the new law, Wednesday’s announcement signals that Biden-era financial regulators will continue their predecessors’ tough stance on China. The ongoing tension over audits comes as the world’s two-biggest economies continue to wrangle over issues ranging from security to trade.
In addition to requiring companies to allow U.S. inspectors to review their financial audits, the law requires firms to disclose whether they are under government control. The SEC’s announcement kick-starts that process by seeking public comment on the type of disclosures and documentation that firms will have to share.

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To: Glenn Petersen who wrote (756)3/26/2021 7:29:24 AM
From: Glenn Petersen
1 Recommendation   of 794
 
China’s dual-listed tech giants lost $60 billion in market value over three days as delisting threats loom

PUBLISHED FRI, MAR 26 20215:43 AM EDT
Eustance Huang @EUSTANCEHUANG
CNBC.com

KEY POINTS

-- As of their Friday close, the market value of Alibaba, JD.com, Baidu and Netease has fallen about $60 billion in just three days, based on CNBC calculations using data from Refinitiv Eikon.

-- The losses came as fears of potential delistings from U.S. stock exchanges resurfaced.

-- To exacerbate matters, China’s tech firms are also facing potential challenges domestically as Beijing seeks to regulate the sector and establish new rules in industries ranging from financial technology to e-commerce.

China’s dual-listed tech giants — Alibaba, Baidu, JD.com, and Netease — have collectively lost billions in market value in just days.

The losses come amid the threat of potential de-listings from U.S. stock exchanges.

As of Friday’s close in Hong Kong, the market capitalization of the four dual-listed tech stocks have fallen 468.64 billion Hong Kong dollars (about $60.31 billion) in three days, according to CNBC calculations of data accessed through Refinitiv Eikon.

Here’s a list showing how much each of the companies, which are also listed in the U.S., lost in terms of market capitalization.

Between Tuesday’s close to Friday’s close in Hong Kong:

Alibaba: Lost 303.1 billion Hong Kong dollars ($39 billion)
Baidu : Lost 107.54 billion Hong Kong dollars JD.com: Lost 30.674 billion Hong Kong dollars
Netease: Lost 27.334 billion Hong Kong dollars

Notable among them is Baidu, China’s largest search engine, which made a lackluster debut in its Hong Kong secondary listing on Tuesday. The shares ended flat on the first day of trading.

On Wednesday, the U.S. Securities and Exchange Commission (SEC) adopted a law that threatens to remove companies from the U.S. stock exchanges unless they comply with American auditing standards.

Known as the Holding Foreign Companies Accountable Act, the law was passed by the administration of former President Donald Trump.

Firms identified by the SEC will require auditing by a U.S. watchdog and need to show that they are not owned or controlled by a government entity in a foreign jurisdiction. Companies will also have to name any board members who are Chinese Communist Party officials, the SEC said in a Wednesday statement.

In addition to those regulatory uncertainties, China’s tech firms are also facing potential challenges domestically as Beijing tightens its grip on the fast-expanding sector and establishes anti-monopoly laws in financial technology and e-commerce.

Reuters reported earlier this week that Chinese tech conglomerate Tencent’s founder met with Chinese antitrust officials this month to discuss compliance at his group.

In a high-profile crackdown last year, the IPO of Ant Group — which was touted to be the biggest in the world — was abruptly suspended just days before its debut. The billionaire founder of Alibaba Jack Ma is the controller of Ant Group.

Beyond those concerns, the tech sector as a whole globally has also come under pressure as bond yields have risen. Rising yields hurt growth stocks, which many in the tech sector are part of, as they reduce the relative value of future earnings.

Furthermore, as optimism rises over a potential global economic recovery from the pandemic, investors may look to rotate their portfolios away from tech, and into other areas such as stocks that gain as the economy recovers.

— CNBC’s Arjun Kharpal contributed to this report.

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From: Glenn Petersen4/10/2021 6:28:55 AM
2 Recommendations   of 794
 
China slaps Alibaba with $2.8 billion fine in anti-monopoly probe

PUBLISHED FRI, APR 9 20219:53 PM EDT
UPDATED FRI, APR 9 202111:55 PM EDT
Christine Wang @CHRISTIIINEEEE
CNBC.com

KEY POINTS

-- Chinese regulators hit Alibaba with a 18.23 billion yuan ($2.8 billion) fine in its anti-monopoly investigation of the tech giant, saying it abused its market dominance.

-- The probe’s main focus was a practice that forces merchants to choose one of two platforms, rather than being able to work with both.

--The company said in a statement it accepted the penalty and will comply with the regulator’s determination.

Chinese regulators hit Alibaba with a 18.23 billion yuan ($2.8 billion) fine in its anti-monopoly investigation of the tech giant, saying it abused its market dominance.

Regulators opened a probe into the company’s monopolistic practices in December. The investigation’s main focus was a practice that forces merchants to choose one of two platforms, rather than being able to work with both.

In a Saturday statement, China’s State Administration for Market Regulation (SAMR) said this policy stifles competition in China’s online retail market and “infringes on the businesses of merchants on the platforms and the legitimate rights and interests of consumers,” according to a CNBC translation of a Chinese-language statement.

The government said that “choose one” policy and others allowed Alibaba to bolster its position in the market and gain unfair competitive advantages.

In addition to the fine, which amounts to about 4% of the company’s 2019 revenue, regulators said Alibaba will have to file self-examination and compliance reports to the SAMR for three years.

The company said in a statement it accepted the penalty and will comply with the SAMR’s determination. Alibaba said it fully cooperated with the investigation, conducted a self-assessment and already implemented improvements to its internal systems.

“Alibaba would not have achieved our growth without sound government regulation and service, and the critical oversight, tolerance and support from all of our constituencies have been crucial to our development,” the company said.

The company added it will hold a conference call on Monday at 8 a.m. Hong Kong time to discuss the fine.

The announcement is the latest development in China’s crackdown on its technology companies. Regulators have been increasingly concerned about the power of China’s tech giants, particularly those who operate in the financial sector.

Much of that heightened scrutiny has sharpened around the business empire of billionaire Jack Ma, who founded both Alibaba and Ant Group.

Ant’s highly anticipated initial public offering was abruptly suspended in November shortly after Chinese regulators published new draft rules on online micro-lending, a key part of the company’s business. The China Securities Regulatory Commission also summoned Ma and other Ant execs ahead of that announcement.

Ma appeared to come under fire for comments that were critical of China’s financial regulator, saying the country’s financial system was “the legacy of the Industrial Age.”

After the Ant IPO was suspended, Ma dropped out of the spotlight, fueling speculation over his whereabouts. In January, the eccentric billionaire briefly reappeared in a video as part of one of his charity foundation’s initiatives.

Ant has since committed to listing and said it would help employees monetize shares.

— CNBC’s Arjun Kharpal, Evelyn Cheng and Eunice Yoon contributed to this report.

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To: Glenn Petersen who wrote (758)4/10/2021 11:21:56 AM
From: Sr K
   of 794
 
WSJ coverage is similar

Alibaba Hit With Record $2.8 Billion Antitrust Fine in China

Penalty comes amid regulatory scrutiny on business empire of Alibaba founder Jack Ma


Alibaba Group is being fined a record amount following an antitrust investigation by Chinese authorities.PHOTO: THOMAS PETER/REUTERS

By
Keith Zhai

Updated April 10, 2021 1:22 am ET

China’s antitrust regulator imposed a fine equivalent to $2.8 billion against Alibaba Group Holding Ltd. for abusing its dominant position over rivals and merchants on its e-commerce platforms, a record penalty in the country that comes amid a wave of scrutiny on the business empire of company founder Jack Ma.

China’s State Administration for Market Regulation said Saturday in Beijing that Alibaba punished certain merchants who sold goods both on Alibaba and on rival platforms, a practice that it dubbed “er xuan yi”—literally, “choose one out of two.”

As part of the penalty, regulators will require that Alibaba carry out a comprehensive revamp of its operations and submit a “self-examination compliance report” within the next three years, they said. The 18.2 billion yuan fine is equivalent to 4% of the company’s domestic annual sales, the regulator added. Under Chinese rules, antitrust fines are capped at 10% of a company’s annual sales.

Alibaba’s business practices limited competition, affected innovation, infringed on the rights of merchants and harmed the interests of consumers, the regulator said.

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To: Sr K who wrote (759)4/12/2021 6:15:59 AM
From: Glenn Petersen
   of 794
 
Alibaba shares rise 6% in U.S. premarket trading after $2.8 billion anti-monopoly fine

PUBLISHED SUN, APR 11 20219:52 PM EDT
UPDATED MON, APR 12 20214:32 AM EDT
Arjun Kharpal @ARJUNKHARPAL
CNBC.com

KEY POINTS

-- Alibaba was fined 18.23 billion yuan ($2.8 billion) by Chinese regulators as a result of an anti-monopoly investigation.

-- Alibaba shares rose 6% in premarket trading in the U.S. following a 6.5% rally in Hong Kong.

-- Alibaba CEO Daniel Zhang said he does not expect a material impact on the company from the change of this exclusivity arrangement.

GUANGZHOU, China — Alibaba shares rose 6% in premarket trading in the U.S. after the company was fined 18.23 billion yuan ($2.8 billion) by Chinese regulators as a result of an anti-monopoly investigation.

Alibaba’s Hong Kong-listed shares closed 6.5% higher on Monday.

“Despite the record fine amount, we think this should lift a major overhang on BABA and shift the market’s focus back to fundamentals,” Morgan Stanley wrote in a note on Sunday, a day after the fine was issued.

Chinese regulators opened an anti-monopoly probe into Alibaba in December. The main focus was around a practice that forces merchants to list their products on one of two e-commerce platforms, rather than choosing both.

China’s State Administration for Market Regulation (SAMR) said on a Saturday that this practice stifles competition in China’s online retail market and “infringes on the businesses of merchants on the platforms and the legitimate rights and interests of consumers.”

Alibaba CEO Daniel Zhang said he does not expect a material impact on the company from the change of this exclusivity arrangement.

Zhang also said Alibaba will introduce new measures to lower the entry barriers and costs for businesses and merchants on the platform. The company will also continue to expand to smaller Chinese cities and rural areas, the CEO added.

China’s technology companies have grown, largely unencumbered, into giants. But Beijing is becoming increasingly concerned by the power of these firms.

Regulatory scrutiny has focused on Alibaba founder Jack Ma’s empire after the billionaire made some comments in October that appeared critical of China’s financial regulator.

Not long after, regulators pulled the plug on what would have been a record-setting initial public offering of Ant Group, the financial technology giant Ma founded.

Joe Tsai, the executive vice chairman of Alibaba, said on Monday he is not aware of any more investigations regarding the anti-monopoly law.

“We are pleased that we are able to put this matter behind us,” Tsai said.

But Tsai said that Alibaba and its peers are subject to inquiries from regulators on mergers, acquisitions and strategic investments as part of a review process.

In addition to the fine, which amounts to about 4% of the company’s 2019 revenue, regulators said Alibaba will have to file self-examination and compliance reports to the SAMR for three years.

CNBC’s Christine Wang contributed to this report.

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From: Glenn Petersen4/12/2021 8:14:25 AM
   of 794
 
Jack Ma’s Ant Group to become financial holding company under a Beijing-enforced revamp

PUBLISHED MON, APR 12 20217:41 AM EDT
UPDATED MON, APR 12 20217:52 AM EDT
Reuters

KEY POINTS

-- Jack Ma’s Ant Group will restructure as a financial holding company, China’s central bank said on Monday.

--The fintech giant’s $37 billion IPO was derailed by risk-wary regulators days before it was due to list in November.

-- The overhaul comes two days after e-commerce giant Alibaba, of which Ant is an affiliate, was hit with a $2.75 billion antitrust penalty as China tightens controls on the “platform economy.”

China’s Ant Group, the fintech giant whose $37 billion initial public offering was derailed by risk-wary regulators days before it was due to list in November, will restructure as a financial holding company, the country’s central bank said on Monday.

The overhaul comes two days after e-commerce giant Alibaba, of which Ant is an affiliate, was hit with a $2.75 billion antitrust penalty as China tightens controls on the “platform economy.”

Under terms of the settlement, Ant will restructure as a financial holding company, a move that, along with other restrictions announced on Monday, is expected to curb its profitability and valuation.

“Ant Group attaches great importance to the seriousness of the rectification,” the company said in a statement, adding it planned to set up a personal credit reporting business and to fold its two flagship lending businesses into its consumer finance company.

The People’s Bank of China said that under a “comprehensive and feasible restructuring plan,” Ant would cut the “improper” linkage between payments service AliPay, virtual credit card business Jiebei and consumer loan unit Huabei.

The central bank also asked Ant to break its “monopoly on information and strictly comply with the requirements of credit information business regulation.”

The company, part of the sprawling business empire founded by billionaire Jack Ma, agreed to improve corporate governance and “rectify illegal financial activities in credit, insurance and wealth management,” the central bank said.

The central bank said it had also asked Ant to control its leverage and product risks, and control the liquidity risk of its flagship fund products and to “actively lower” the size of its massive Yu’eBao money market fund.

The measures “set an example” for financial regulation of the platform economy,” the state-backed Economic Daily newspaper said in a Monday commentary.

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To: Glenn Petersen who wrote (761)4/12/2021 9:15:18 AM
From: The Ox
   of 794
 
These items are major positives for BABA. The main uncertainty has been removed and that should help them rebound over time, IMO.

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To: The Ox who wrote (762)4/12/2021 9:23:09 AM
From: Glenn Petersen
1 Recommendation   of 794
 
Agreed. The dollar amount of the settlement was inconsequential. The fact that they settled was the important news. There will be no appeal, of course. Hard to imagine Alphabet, Facebook and Amazon going down without a fight.

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To: Glenn Petersen who wrote (763)4/12/2021 9:29:26 AM
From: The Ox
1 Recommendation   of 794
 
Forward PE under 20 makes this look extremely attractive. Especially in light of the expectations for over 30% growth in revenues the next couple of years.

We'll see....

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From: Sr K4/12/2021 1:20:00 PM
1 Recommendation   of 794
 
WSJ

Jack Ma’s Ant Group Bows to Beijing With Company Overhaul

China’s central bank said Ant will apply to become a financial holding company, subjecting it to regulations similar to those governing banks

What Happened to China's Superstar Entrepreneur Jack Ma



After Jack Ma criticized Chinese regulators, Beijing scuttled the initial public offering of his fintech giant Ant and he largely disappeared from public view. WSJ looks at recent videos of the billionaire to show how he got himself into trouble.

By
Jing Yang

Updated April 12, 2021 8:23 am ET

Ant Group Co., the financial-technology giant controlled by billionaire Jack Ma, will apply to become a financial holding company overseen by China’s central bank, overhauling its business to adapt to a new era of tighter regulation for internet companies.

In a statement, the People’s Bank of China said Ant representatives were summoned to a meeting Monday with four regulatory agencies that also included the country’s banking, securities and foreign-exchange overseers. It said a “comprehensive, viable rectification plan” for Ant has been formulated under the regulators’ supervision over the past few months.

The directive follows an intense regulatory assault on Mr. Ma’s business empire that began with the suspension of the company’s blockbuster initial public offering in November. Ant had been on track to sell more than $34 billion worth of stock and list on stock exchanges in Hong Kong and Shanghai, when Beijing pulled the plug on the dealafter Mr. Ma criticized financial regulators in a public speech.

In January, The Wall Street Journal reported that Ant was planning to fall fully in line with China’s financial regulations by turning itself into a financial holding company, essentially subjecting Ant to regulations similar to those governing banks.

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