Alibaba Group shares crashed in early trading on Tuesday after China’s state broadcaster announced the arrest of someone with the same surname as the e-commerce company’s founder.
CCTV, China’s state broadcaster, reported Tuesday morning that police in Hangzhou, Alibaba’s home city, had taken “compulsory measures” against an individual with the last name Ma on April 25. The broadcaster said Ma had been apprehended on charges of using the internet to engage in activities endangering national security.
Investors, fearing that the individual in question was Alibaba’s billionaire founder Jack Ma, quickly dumped their shares, causing the stock to crash by as much as 9.4%, erasing about $26 billion in value.
The initial CCTV report stated that the suspect’s full name had two characters. But the broadcaster later revised that report to reflect a clarification issued by Hangzhou’s police: The arrested individual’s full name has three characters.
That distinction made all the difference. The full name of Jack Ma, whose given name in Chinese is Yun, has only two characters. By noon Hong Kong time, Alibaba shares had pared losses to just 1.8%.