Alibaba Shares Extends Slide On Reports of US Investment Blacklist

Alibaba Group Holding Ltd.  (BABA) – Get Report shares traded lower Thursday amid reports that Asia’s most valuable tech company could be added to a U.S. investment blacklist by the outgoing administration of President Donald Trump.

Both the Wall Street Journal and Reuters reported late Wednesday that Alibaba and its main China-based rival, Tencent Holdings  (TCEHY) , could be added to a list of companies that the Defense Department alleges have ties to the Chinese military. Trump signed an Executive Order on November 12 that bans U.S. investors from buying shares of those companies, which include chipmaker SMIC, Hikvision and state-backed oil group CNOOC. 

He also banned transactions with eight popular China-based payment apps, including Alipay, the platform owned by Alibaba’s Ant Group subsidiary.

Trump also signed legislation last month — The Holding Foreign Companies Accountable Act — that could remove China-based companies from U.S. stock exchanges if they don’t comply with American auditing standards.

Alibaba’s U.S.-listed shares fell 2.14% in early trading Thursday on the New York Stock Excahnge, following a 5% slump yesterday, to change hands at $223.16. Tencent was market 1% lower in the OTC market at $72.95 each.

Alibaba is also facing pressure in its domestic market after Chinese regulators set their sights on Asia’s most valuable tech company last month in their latest attack on the financial empire of billionaire Jack Ma.

China’s State Administration for Market Regulation launched its probe into Alibaba on Christmas Eve, and demanded a meeting with officials from Ant Group amid a broader push to tackle anticompetitive practices in internet commerce, including the alleged pressuring of merchants to list their goods on a single online platform.

The investigation follows last month’s dramatic suspension of the planned $37 billion IPO of Ant Group and the summoning of billionaire Ma by government officials, as well as the People’s Bank of China, to “provide views regarding the health and stability of the financial sector”.


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