Ln July 29, forty-eight hours after the publication of its 2021 annual report, Alibaba saw its shares plunge more than 11% in a single day on the New York Stock Exchange (NYSE) and for good reason: the Securities and Exchange Commission ( SEC), Wall Street’s “policeman” added it to its list of Chinese listings that violated the federal Holding Foreign Companies Accountable Act (HFCAA).
If it only givesone more name on the long list, which now includes 159 candidates for delisting for non-compliance with American auditing standards, the fall of the company founded by Jack Ma would mark the end of an era.
Obviously celebrated as the largest IPO in history by raising 25 billion dollars in September 2014 (around 19.4 billion euros at the time), Alibaba harbored no illusions as to its continued existence on Wall Street and envisaged the worst-case scenario, because the 27 July, while submitting its annual report to the SEC, it filed an application with the Hong Kong Stock Exchange for a second primary listing. Everything indicates that the group is preparing its withdrawal with fatality and that the countdown to its delisting is well underway. Without a gesture from Beijing, the American stock market will be emptied of Chinese ratings by the end of 2024.
However, it all started as a cordial agreement between the companies of the red empire, which wanted access to the largest capital market in the world, and Wall Street, for which money has no color. For more than ten years, the so-called “capitalism with Chinese characteristics” has been praised by countless analysts disappointed with capitalism itself, and the arrival of Chinese companies has delighted Western investors whose funds have also contributed to the expansion of the champions of the second world power.
improbable honeymoon
To measure the perfect financial “coupling” of the two shores of the Pacific, it suffices to browse the list of holders of Alibaba securities on which appear the names of the largest banks, such as Goldman Sachs and HSBC, but also California Public Employees Retirement System (Calpers), the largest US public pension fund, and Ontario Teachers’ Pension Plan, the second largest institutional fund in Canada that manages the retirement of Ontario teachers, to name but a few.
The improbable honeymoon could have lasted if China did not consider that the audit documents of its companies operating on foreign soil are a matter of national security and that the inspection of said documents by the American regulator constitutes a violation of the national sovereignty.
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