Investors Dump More Alibaba Shares as Bears and Bulls Grapple

Alibaba’s Beijing headquarters on April 10. Photo: VCG

Institutional investors further dumped shares of Alibaba Group Holdings Ltd. in the second quarter as Chinese regulators tightened scrutiny of internet companies.

Institutional investors’ holdings of the e-commerce giant’s American depositary shares (ADSs), securities representing non-U.S. companies’ shares, accounted for 24.3% of its total shares at the end of June, 8.6 percentage points lower than a quarter earlier. The decline almost doubled the drop of 4.6 percentage points at the end of March, public filings show.

Investor sales of Alibaba, the biggest U.S.-traded Chinese company by market value, reflected deepening concerns about China’s tightening regulations on tech companies. Beijing halted the public listing of Alibaba-affiliated fintech titan Ant Group Co. Ltd. in early November, and in April fined Alibaba a record 18.2 billion yuan ($2.8 billion) for violating antitrust laws.

At the end of June, the number of institutional investors holding Alibaba ADSs dropped further to 1,796, down 1.6% from a quarter earlier.

Bears and bulls split over Alibaba in the second quarter. Investment manager T. Rowe Price, which holds the most Alibaba ADSs among institutional investors, dumped about 16 million of the shares, while Swiss National Bank liquidated its entire stake.

On the other hand, Goldman Sachs expanded its holdings in Alibaba by nearly 6 million ADSs, the most among institutional investors. Chinese private equity shop Hillhouse Capital bought 577,700 Alibaba ADSs, a more than fivefold increase from the first quarter.

Overall, the share prices of U.S.-traded Chinese tech companies have been on a roller coaster ride over the past six months amid a series of tough regulations launched by Beijing.

Alibaba’s ADSs closed down 0.8% Wednesday at $172.35 apiece in New York, down 26% this year.

Contact editor Bob Simison (bobsimison@caixin.com)

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