Losers (in alphabetical order)
1 Alibaba
Alibaba’s stock is down 53 percent over the past 12 months. The company was worth $900 billion in late 2020, before Jack Ma’s infamous speech to Communist Party elders prompted them to halt his spinning out Ant Group as a separately listed company. Today it’s worth about $300 billion.
Becoming the poster child for Beijing’s Big Tech crackdown has been terrible for what was China’s marquee tech success story. AliPay has been split into three companies and its lending businesses forced under bank regulations. China’s launch of an e-RMB is designed to assert sovereign control over the payments data controlled by AliPay and rival WeChat Pay. Alibaba’s businesses elsewhere, including its virtual banks in Hong Kong and Singapore, have been silent this year, as much under the radar as the once high-flying Ma.
In the past week, Alibaba’s share price has shown signs of life again. The company has overhauled its C-suite. China’s regulators are shifting gears to promote domestic innovation and consumption. AliPay is critical infrastructure in China and has stakes in important fintechs worldwide. But the swagger is unlikely to return.
2 GoBear
Singapore-based comparison site GoBear closed in January, in a surprise move considering the company had recently raised $17 million the previous spring. That deal had brought its total funding to $97 million since the company launched in 2015.
The company cited an inability to raise additional funding due to Covid. The question, however, is what it was doing with its existing funding. GoBear didn’t do anything epicly wrong. It appears to have made some honest moves that didn’t work out, like too much expansion into new markets, rolling out products that weren’t suited to the Covid environment, and struggling against competitors in places like Hong Kong and Singapore. Startups are hard.
3 LinkLogis
This Hong Kong-based fintech, with a stake in a Singapore virtual bank, a partnership with Standard Chartered Bank, and backing from Tencent, was riding high in May. It had just listed on the Hong Kong Stock Exchange, raising over US$1 billion, and was considered a leader in supply-chain fintech for China.
Two months later, an anonymous short seller published research claiming the company’s tech chops were illusory, and that the firm was really just an overleveraged play on Chinese real estate.
The short sellers look to have had a good second half: LinkLogis’s share price of HK$24.50 in early May has now fallen to HK$7.08, and its IPO valuation of US$5.5 billion has been reduced to a mere US$2.1 billion.
