Alibaba and Tencent shares fall after WSJ US Blacklist Report

Jack Ma, CEO of the Chinese e-commerce giant Alibaba, speaks during his visit to the Vivatech exhibition for startups and innovations on May 16, 2019 in Paris.

Philippe Lopez | AFP | Getty Images

Alibaba and Tencent stocks fell Thursday after the Wall Street Journal reported that the Trump administration could blacklist Chinese tech giants.

The conglomerates’ stocks fell around 4% on the Hong Kong Stock Exchange after the Journal said officials are considering banning Americans from investing in the companies. The report quoted several people who were familiar with the matter.

The US government blacklisted 31 Chinese companies in November over fears that it would support the Beijing military through an executive order. US officials have been discussing expanding the executive order to expand the blacklist, the journal’s sources said.

When the Hong Kong Stock Exchange closed, Tencent’s share price fell 4.69% to 568.5 Hong Kong dollars, while Alibaba’s share price fell 3.91% to 221 Hong Kong dollars.

In premarket trading, US-listed Tencent shares fell 2.8% and Alibaba’s shares fell slightly into the red.

If they are blacklisted in the US, American investors will no longer be able to trade their stocks starting January 11th. Those who already own shares in the companies would have until November to outsource them.

Trump signed the first executive order shortly after Joe Biden lost the 2020 presidential election, and it already has ramifications. The New York Stock Exchange confirmed on Wednesday that it plans to delist China Mobile, China Telecom and China Unicom.

On Tuesday, the Trump administration decided to ban Chinese payment apps like Alipay and WeChat Pay, which are linked to Alibaba and Tencent, respectively.

In December, the US blacklisted Chinese drone company DJI and Semiconductor Manufacturing International. The US Department of Commerce said the action against SMIC “is based on China’s Doctrine of Military-Civilian Fusion (MCF) and evidence of activities between SMIC and affected entities in the Chinese military industrial complex.”

Alibaba’s struggles extend beyond the United States and home, where Chinese regulators recently opened an antitrust investigation into the company.

Jack Ma, the founder and CEO of Alibaba, remains unobtrusive and has not been seen publicly since last October after apparently criticizing the country’s regulators.

Alibaba and Tencent did not immediately respond to CNBC’s request for comment.

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