The largest technology companies in China had to pay for supporting the course of the government, which recently announced a policy of”universal prosperity”. Seven tech giants who announced charitable contributions faced a drop in shares, writes Bloomberg.
The most recent of China’s tech giants reported donations from Alibaba Group. On September 2, the company promised to allocate $ 15.5 billion over the next five years for the development of small technology firms. After the announcement, the company’s shares on the New York Stock Exchange fell by 0.7 percent and closed at $ 172 apiece, although securities were getting more expensive on the Hong Kong stock exchange.
Most of all, after the announcement of donations, securities fell in price at Pinduoduo. In the trading session on March 18, they fell by 5.1 percent, to $ 142 apiece. Lenovo shares after the charitable contribution on April 1 lost 2.4 percent and traded at $ 1.4, and Meituan quotes on June 4 fell by 1.7 percent, to $ 38.9.
Xiaomi and Offcn Education securities did not suffer so much from charity — they became cheaper by 0.5 percent and traded at $ 3.6 on July 19 and $ 5.1 on March 3, respectively.
In 2021, China’s billionaires gave a record amount for the benefit of the country — $ 5 billion. The growth of financial assistance can be correlated with the position of Chinese President Xi Jinping, who speaks about the importance of” universal prosperity ” — reducing the difference in wealth between the rich and the poor.