Alibaba is to jettison a recently purchased media company, months after a crackdown by Chinese authorities focused on its growing internet power and sent the e-commerce giant’s stock tumbling.
An investment arm of Alibaba Group Holding will divest its entire stake of 5.01% in broadcaster Mango Excellent Media, the media firm said.
The sale comes after the investment in December, as Chinese authorities mount an anti-trust crackdown on large tech companies. One major target has been Alibaba, which faced a fine of $2.75 billion over anti-competitive practices.
The authoritarian leadership in Beijing has made little secret of the fact it wants the company owned by billionaire Jack Ma to shed its media interests, including the South China Morning Post, Hong Kong’s leading English-language newspaper.
CULTURAL REVOLUTION
China’s regulatory crackdown has also targeted tech firms, including ride-hailer Didi Chuxing and online education companies. Critics liken the moves to the disastrous Cultural Revolution of the 1960s and 70s, which saw the ruling Communist Party crush anything considered a threat to its rule.
In Thursday’s filing to the stock exchange, the media company said Alibaba’s investment arm would seek a waiver from a one-year lockup to which it committed at the time of its investment.
Since then, shares of Mango Excellent Media have fallen roughly 40%. The firm, based in China’s western province of Hunan, produces internet and television content besides running a shopping division.
Alibaba did not respond to a request for comment.
MEDIA INTERESTS
Alibaba’s stock price has fallen by nearly half since last October, when authorities abruptly halted plans for its financial affiliate, Ant Group, to go public.
Mango Excellent Media is one of several media-related investments funded by Alibaba, which is a major shareholder in Weibo Corp, China’s social media equivalent of Twitter.
In July Reuters reported that Weibo was in talks to go private with the help of a Shanghai-based state-owned company, in an effort to help Alibaba divest. After the report, the firm’s chairman, Charles Chao, said he had no such discussions.
In addition to Weibo, Alibaba owns stakes in some small Chinese online media and has its own filmmaking division, Alibaba Pictures.
- Reuters with additional editing by Mark McCord
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