• A state-media report saying that a person surnamed Ma was being probed.
  • Jack Ma's Alibaba's share price plunged, but regained losses after a correction was made to the report.
  • The wild swing showed how investors were still fearful of Beijing's crackdown on the tech sector. 

For a brief moment on Tuesday, people thought Jack Ma, the elusive founder of China's e-commerce behemoth Alibaba, had resurfaced — on the wrong side of the law.

Ma has stayed largely out of public view since Beijing cracked down on his companies in late 2020.

But on Tuesday morning, Chinese state broadcaster CCTV reported that police in the city of Hangzhou, where e-commerce giant Alibaba is based, had been investigating a person with the surname Ma since April 25. 

Details in the terse 86-word report were lacking, but investors were spooked anyway. Many assumed that the person in question was Jack Ma, whose Chinese name is Ma Yun. After the news broke, Alibaba's share price in Hong Kong slid 9.4% in early trading, wiping about $26 billion from its market value, Bloomberg reported.

Another state media outlet, Global Times, soon followed up with a report citing unnamed sources that said the individual in question actually had three characters in his name. The person was born in 1985, making him two decades younger than Alibaba's founder, per Global Times, and was identified as a director of hardware research and development at an IT company.

That seemed to ease investors' fears somewhat. Alibaba's shares rose following the Global Times report, and closed the trading day in Hong Kong just 0.83% lower. 

The wild swing in Alibaba's share price underscores how sensitive tech investors have become regarding signs that Beijing is closing in on any of the tech giants.

In recent years, China has launched antitrust probes against tech companies, increased oversight of data security, and restricted consumers' usage of internet and gaming platforms. At the same time, China's tech firms are struggling to get users and consumers to spend more amid a cooling economy. 

Alibaba has borne the brunt of Beijing's crackdown. After Ma openly clashed with regulators in late 2020, Beijing responded by forcing Ant Group, the financial unit of Alibaba, to stop its IPO in New York. Authorities also launched an investigation into Alibaba for allegedly abusing its leading market position.

However, Beijing has in recent months signaled that it's easing off on the crackdown. On Friday, the government said it would "promote the healthy development of the platform economy." That led to a surge in internet stock prices, Bloomberg reported.

Yet Alibaba share-price fiasco on Tuesday showed that investors are still feeling shaky.

"China imposed quite a lot of draconian policies on the tech companies and now everyone is on alert — if anything happens, they dump the stocks," an analyst told the Financial Times.

Read the original article on Business Insider