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If a listed company violates its commitments, fails to accurately disclose information in accordance with regulations, or makes false disclosures, causing damage to investors' securities transactions, it may pursue responsibility from the listed company.
Author 丨Kinki
Edit 丨 nuts
Cover source 丨 network
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Although he has retired to the jianghu, Ma Yun and the Ali he single-handedly created are still unable to escape the bloody storm of the capital market.
Recently, the first four US stock investors to file a lawsuit against Alibaba amended the complaint and listed Ma Yun as a new defendant.
Ma Yun, who resigned as chairman of Alibaba in September 2019 and completed his resignation in October 2020, is no longer holding a position in the group, but this time, he is awkwardly on the dock.
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Litigation stemming from stock prices
The lawsuit stems from 2021, when four U.S. investors filed a class action lawsuit against Alibaba in the U.S. District Court on the grounds that Ali's stock price plummeted and damaged their investments, and demanded that Ali and Jack Ma compensate for the losses.
However, on April 22 this year, these 4 investors suddenly escalated the lawsuit against Ali and listed Ali founder Ma Yun as the new target of the lawsuit, this time modifying the complaint, the content of the accusation did not change significantly, the biggest difference is to list Ma Yun as a defendant.
Looking back at Ali's stock price, it reached its peak in November 2020, about $298 / share, and now, Ali's stock price is only about $76 at the lowest, a decline of about 70%, according to the latest market value calculations, about 1 and a half years, Ali's market value evaporated about $620 billion.
However, Ali is not the first time to become a defendant, as early as 2020, Ali was collectively sued by US investors for involving securities fraud cases, on the grounds that Ali had some misleading and unrealistic misrepresentations, and did not disclose to investors the facts involving Ant Group, which was the key node for Ant Group to suspend listing.
Logically, investment has risks, always can not earn on the happy, fall to sue, so to speak, every day so many listed companies the stock price rises and falls, this lawsuit is not endless?
Generally speaking, whether foreign or domestic, there are relevant laws and regulations requiring listed companies to disclose information for investors' reference, in this process, if the listed company violates its commitments, does not accurately disclose information according to regulations or falsely discloses, resulting in damage to investors' securities transactions, it can be held accountable to the listed company.
Of course, before the case is formally concluded, we do not know what the outcome will be, at present, whether Ali will eventually be judged to be liable for compensation, whether Ma Yun will bear joint and several liability for compensation, will depend on whether the plaintiff in the case can fully prove, whether it can prove that Ali and Ma Yun have violations of laws and regulations expressly stipulated in local laws, before that, we do not need to speculate too much.
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Why Ali
In fact, since this year, it is not too much to say that it is the "year of stock disaster" for Chinese stocks, not only Ali, Meituan, Tencent, B Station, iQiyi and other Internet companies, as well as the three new car companies of "Wei Xiaoli", have experienced a slippery decline in stock prices.
No Chinese stock can escape the fate of "falling", so why is it Ali and Ma Yun who are the defendants?
First of all, Ali's stock price has indeed fallen seriously. Since last year, the "wind direction" of the domestic Internet industry has begun to change, under the tide of "anti-monopoly", the management of the industry's supervision has begun to gradually strengthen, Ali, Meituan have taken the lead in receiving penalties for "monopoly", it is foreseeable that the industry will bid farewell to the disorderly high growth stage.
In addition, with the decline of the demographic dividend, the traffic of Internet companies has become more and more expensive, the market has changed from "incremental" to "stock", the competition between enterprises is naturally more intense, and the overall profitability of the industry is declining, which is also one of the reasons for the fluctuation of the stock prices of major Internet companies last year.
In the eyes of U.S. investors, in the face of drastic changes in the external environment, Ali's stock price decline seems to be even greater, but its disclosure of risks in earnings reports and public statements is not sufficient.
In the United States, similar to the Ali incident, investors sued listed companies for serious stock price declines. In 2018, Tesla shareholders filed a class-action lawsuit against Musk on the grounds that Musk's "Tesla is bankrupt" tweet misled the market and caused the stock price to fall, so that the shareholders' rights and interests were damaged.
This year, Apple was also subject to a class-action lawsuit by shareholders over the suspicion that Cook concealed the real demand for iPhones in China and gave overly optimistic expectations, resulting in iPhone sales in China falling, affecting stock prices and hurting shareholders' rights.
In fact, such cases are not uncommon in the United States, and some lawyers in the United States also specifically stare at Wall Street and claim huge fines by participating in class actions, if the lawsuit is established, the lawyers will also earn a lot of money, so this time Ali became a defendant due to stock price fluctuations, perhaps it is really because it fell too much.
Secondly, we can also boldly speculate that there are so many Chinese stocks whose stock prices have fallen, why is it Ali? It may also be because Ali and Ma Yun are among the most representative technology companies and entrepreneurs in China.
In 2018, domestic Internet companies, including Ali, Tencent, Baidu and other Internet companies, their market value has been able to compete with American technology companies, but in 2021, the only companies that can still be at the head are Ali and Tencent.
Choosing Ali as a defendant is, to some extent, picking the strongest of the domestic technology companies as a whole, once the litigation is a precedent, it will significantly affect the confidence of investors facing Chinese technology companies, and even further hit the Chinese stocks, in this process, it is difficult to say that the US capital market has no intention of hitting domestic technology companies at all.
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Where do Chinese stocks go from here
Statistics show that in the past year or so, the overall market value of more than 280 Chinese stocks, including Hong Kong stocks, has evaporated by about 20 trillion yuan, and the overall market value has shrunk by nearly 60% compared with the highest point.
Munger, who was once optimistic about investing in China, has repeatedly copied Ali in 2021, but recently changed his attitude and began to reduce his holdings in Ali, and his position was directly cut in half.
Behind the withdrawal of foreign capital and the decline in stock prices, the profitability of domestic Internet technology is declining. Taking Ali as an example, in February, it released its financial report for the third quarter of fiscal 2022 (October-December 2021), net profit fell by 75% year-on-year, and the growth rate of revenue was also slowing, the lowest single-quarter growth rate since its listing in 2014.
In addition to the increasing pressure on the company's own performance, the policy restrictions faced by Chinese stocks in the US market have also become more stringent. According to the Foreign Companies Accountability Act, foreign companies that fail to pass the audit of the U.S. Public Company Accounting Oversight Board for three consecutive years will be banned from listing on any U.S. exchange, and in March this year, the U.S. Securities and Exchange Commission (SEC) has included more than 40 Chinese-owned companies on the "pre-delisting list."
It can be seen that Chinese companies are encountering "internal and external difficulties" in the US capital market, in this context, Chinese companies in the United States may not be able to obtain a good valuation, therefore, many companies have stopped going to the United States IPO, such as Xiaohongshu, Keep and so on.
Correspondingly, the trend of Chinese stocks choosing to return to Hong Kong stocks for listing or privatization is more obvious. At present, the Hong Kong Stock Exchange has returned more than 20 Chinese stocks, including Baidu, Weibo Ideal, Xiaopeng, Weilai, Zhihu, B station and many other Internet and new car manufacturers. According to ciccumb research data, about 25 companies may meet the conditions for returning to Hong Kong in the next 3-5 years.
In March 2022, Sina officially announced the completion of privatization, bidding farewell to the US stock NASDAQ, which has been listed for 21 years, Sina said that privatization is not the end of an era, but a new structure to better open up the future.
However, the current large-scale delisting of Chinese stocks from the United States may not come, at this critical moment, domestic Internet technology companies should actively adapt to the new changes in the industry, under the premise of constantly looking for new growth points, focus on their own operations, improve performance.
For the not very long development history of China's Internet, the collective downturn of Chinese stocks during this period may also provide more thinking for the future development of the industry, after all, when the wind has passed, there are always some false prosperity to be stripped.