As U.S.-Listed China Internet Stocks Dive, Renren CEO Smacks Alibaba on the Way Down (And Gets Smacked Back)
While they are usually much less voluble than the chatty Web execs of Silicon Valley, the execs who run China’s fast-growing Internet companies seem to be keeping up just fine of late.
On Friday, for example, the Alibaba Group’s Jack Ma was positively effusive about wanting to buy all of Yahoo, a company which actually owns 40 percent of Alibaba. “We are very, very interested,” said Ma at an event at Stanford University.
Now, in an interview with Bloomberg, Renren CEO Joe Chen decided to take a smack at Ma over his disputed spinoff of its Alipay payments unit, which caused a high-profile ruckus with Yahoo earlier this year.
“It’s quite unfortunate,” Chen said to Bloomberg about disagreement, which has since been settled. “It caused a lot of uncertainty about Chinese Internet companies.”
Them’s fightin’ words, and a source close to Alibaba reacted with, well, reaction.
“Yeah, it shook confidence so badly that Silver Lake and DST [Global] just decided to put in billions to back Jack Ma,” referring to a recent funding deal by the large investors. “People shouldn’t try to blame their own lack of performance on others.”
Actually, Renren has bigger problems than Alibaba.
According to a substantive report in The Wall Street Journal yesterday, what’s really hurting Chinese Internet companies is the declining stocks caused by recent accounting scandals there, which may have attracted scrutiny from U.S. regulators.
Wrote the Journal: “A series of alleged accounting frauds this year at little-known Chinese companies listed in the U.S. has triggered a sharp shift in sentiment among investors, who are now worried about hidden business risks or financial problems.”
Hence possible investigations by the Securities and Exchange Commission that will surely drag Chinese stocks on U.S. exchanges down more.
And indeed, the stock of Renren — which had its own controversial issue with accurate data reporting at the time of the IPO of the social networking site earlier this year — declined 13 percent Friday, along with other Chinese companies listed here.