Jack Ma refutes "cut holdings to improve life" statement: pure nonsense

"Precision" Reduction in holdings of Huayi Brothers: Ma Yun cashes out 90 million yuan

Alibaba's PR director claims that the cash-out "for improving life" is complete nonsense.

Cash-out Case

Report by Wu Min: Huayi Brothers has become one of the two companies with the most reductions after the first batch of Growth Enterprise Market (GEM) companies had their restricted shares unlocked in November. On November 26, Chairman of Alibaba Group, Ma Yun's reduction intensified this impression.

He stated his optimism about Huayi's future.

The Shenzhen Stock Exchange integrity archive shows that Ma Yun reduced his holding in Huayi Brothers by 3 million shares on November 26, profiting over 90 million yuan. Tao Ran, PR Director of Alibaba, said yesterday that Ma Yun has always been optimistic about the cultural and film/TV industries and would increase investment in these fields. He also expressed great optimism for Huayi’s future. “In more than ten years at Alibaba, Ma Yun often comes up with ingenious ideas, which people only realize later. This move was his own idea, perhaps everyone will understand it afterward.”

According to media reports, a person from Huayi Brothers' secretary office confirmed that Ma Yun had reduced his holding in Huayi Brothers by 3 million shares, "in order to improve life." In response, Tao Ran said, "improving life" is complete nonsense.

If we look from the beginning of November when the first batch of GEM companies' restricted shares became liquid, Huayi Brothers is also the company with the most reductions apart from Zhongyuan Huadian. The Shenzhen Stock Exchange bulk trading system data shows that within November, Huayi Brothers experienced 12 bulk transactions, the largest being 2 million shares, the smallest 500,000 shares, totaling 12.645 million shares, involving funds exceeding 360 million yuan.

Apart from individual shareholders, executives and their relatives of listed companies also frequently appear in the list of cash-outs. The Shenzhen Stock Exchange integrity archive shows that from November 1 to 26, Wang Yulian (mother of Huayi Brothers director Yu Feng), Sun Xiaolu (wife of Supervisory Committee Chairman Tan Zhi), and supervisor Zhao Ying were frequently listed, reducing holdings 30 times in total. Apart from bulk transactions, they also heavily reduced through competitive bidding transactions.

Reduced the day before reaching a new high

Since Huayi Brothers has been unlocked, Ma Yun and other restricted share shareholders do not need to pay income tax on the transfer of restricted shares.

From a timing perspective, investors' reductions in Huayi Brothers and other stocks all seemed "appropriate". Since November, the GEM index has shown a stepwise upward trend, with two declines but followed by steady growth. And just on Monday this week, the GEM index hit a new high. Ma Yun's reduction of Huayi Brothers on November 26 was exactly the trading day before the GEM index hit a new high.

The cost of these natural person-held shares is generally very low. Still taking Ma Yun as an example, after various dividends and distributions, Ma Yun's holding cost is around 0.188 yuan per share. Ma Yun holds a total of 27.648 million shares, with one quarter becoming liquid each year. Currently, Huayi Brothers' stock price is 29.11 yuan per share. The market price is already 155 times the holding cost.