Jack Ma's net worth falls by $11 billion after announcing departure

Jack Ma's net worth falls by $11 billion after announcing departure
Jack Ma, Founder and Executive Chairman, Alibaba Group.
PHOTO: Reuters

Alibaba stock fell 3.7 percent on Monday after Jack Ma announced plans to hand over the chairman position to CEO Daniel Zhang, slashing US$15.6 billion (S$21.4 billion) in company's net worth compared with the previous trading day, and making Ma's retirement plan the "the most expensive retirement plan ever", according to a report by the 21st Century Business Herald.

Alibaba Holding Group Ltd was listed in Nasdaq on Sept 20, 2014, with a price of US$68 per share, making it the US' largest IPO ever. The company's stock jumped 38.07 percent to US$93.89 on the first trading day. The rising stock prices made Ma the richest man in China that year, according to the Forbes China Rich List released on Oct 28, 2014.

The stock price of Alibaba skyrocketed to US$211.7 on June 5, 2018, making the company's net worth reach US$550 billion, with Ma's net worth peaking at US$35.1 billion.

However, with trade tensions rising, and the US dollar strengthening, Alibaba's stock price has seen ups and downs since June, with Ma's leaving the hardest hit these days.

Ma owns 6.4 percent of Alibaba shares, according to Alibaba's semi-annual report of 2018. As the company's net worth plunged to US$415.2 billion Wednesday, Ma's real-time net worth as of Sept 12 was US$26.6 billion, an US$8.5 billion fall from his peak time of US$35.1 billion.

But Wall Street analysts seem largely unfazed by Ma's stepping down from his chairman position in a year, marketwatch.com reported. "The long-time frame for Ma's departure from the board as well as his intent to continue advising the company in a reduced role 'should enable a smooth transition with lower key man risk,'" wrote Jefferies analyst Karen Chan.

"Alibaba stock is unequivocally a buy in the long-term," said a report of Yahoo Finance. "This is a company that is dominating the booming China commerce industry, as well as dipping its toes into next-gen industries like cloud and AI," said the report. "In other words, this is a big growth stock trading at a big discount. That is usually a recipe for a long-term winner," it added.

ALSO READ: Alibaba's Jack Ma plans to go back to teaching

Besides Alibaba, three other Chinese internet giants, the Baidu, Tencent, and JD have all witnessed ups and downs in stocks.

Shares of Tencent Holdings continued to drop after reaching a record high of HK$475.6 (S$83.07) on Jan 29 this year, due to stricter government regulation on its major online game business. The latest net worth of Tencent Holdings is HK$ 2.94 trillion, a HK$1.6 trillion cut compared with its peak.

Tencent Holdings announced to repurchase 125,000 shares of company's stocks at HK$38.6 million on Sept 12 to maintain its stock price, the fourth consecutive day of such stock operation. The company has repurchased a total of 397,700 shares at HK$124 million since Sept 9.

The net worth of Tencent chairman and CEO Pony Ma has shrunk HK$80 billion to HK$252.88 billion from the beginning of the year.

Affected by CEO Richard Liu Qiangdong's negative news recently, JD's stock price dropped 34.6 per cent within this year with a company net worth at $39.96 billion. The net worth of chairman Liu also fell to $7 billion as of Sept 12, 2018, according to the Forbes Billionaire 2018 list.

Baidu remains the most stable competitor in stock price this year, with a mild 7.73 per cent slump within the year. The company's net worth is US$76.56 billion, and CEO Robin Li's net worth is US$12.2 billion, dropping around US$9 billion compared with the year's beginning.

According to the calculation of the 21st Century Business Herald, total net worth of Baidu's Robin Li, Alibaba's Jack Ma, Tencent's Pony Ma and JD's Richard Liu have shrunk US$17 billion since the beginning of the year.

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