A Chinese billionaire loses $27 billion in the world’s largest wealth drop


A Chinese billionaire loses $27 billion in the world’s largest wealth drop

Pinduoduo was founded in 2015 by Colin Huang, who owns a 28 percent stake in the company.

According to Bloomberg, Colin Huang, the founder of Chinese e-commerce platform Pinduoduo Inc, has suffered the greatest loss of wealth in the world this year.

Bloomberg Billionaires Index estimates that Huang’s net worth has plummeted by more than $27 billion as a result of a drop in the value of his company’s stock as China cracks down on internet giants. This is the largest decline among the index’s 500 members, and it is significantly larger than the approximately $ 16 billion loss suffered by Hui Ka Yan, the chairman of the China Evergrande group, whose real estate empire is struggling under a mountain of debt.

President Xi Jinping, who calls for “common prosperity” and has control over the country’s private sector companies, is the most visible example of how the tide has shifted in favor of China’s billionaire class in recent months. A greater percentage of the value of Pinduoduo’s stock, or PDD, has been lost this year than the value of the shares of Alibaba Group Holding Ltd or Tencent Holdings Ltd.

Compared to its peers with “mature, profitable models,” such as Alibaba and Tencent, PDD is “more vulnerable to repression,” according to Kenny Ng, senior securities strategist at Everbright Sun Hung Kai Co in Hong Kong. “This is the primary reason why stock performance lags behind that of other technology companies.”

In response to requests for comment, a representative from PDD did not respond.

Pinduoduo’s certificates of deposit in the United States have fallen 44 percent this year, compared to a 33 percent decline in Alibaba’s ADRs. Tencent’s Hong Kong-listed shares have fallen by 20 percent so far this year.

Huang, who owns a 28 percent stake in PDD, founded the company in 2015 and transformed it into an e-commerce behemoth that pioneered the concept of community purchasing. In December, PDD’s annual active users surpassed 779 million users on Alibaba’s online marketplaces, bringing the total number of active users to 788 million.

The company’s market capitalization reached a high of $ 178 billion before tumbling to a low of approximately $ 125 billion. Earlier this month, it reported its first quarterly net profit since becoming a state-owned enterprise (SEO).

Huang, who is now estimated to be worth approximately $ 35 billion, stepped down as general manager last year and as chairman in March of this year.

PDD is one of the technology behemoths that have pledged current and future profits for their respective companies to invest in philanthropic projects as part of President Xi’s campaign to close China’s wealth disparity. He announced last month that he would set aside $1.5 billion in revenue to aid in the development of agriculture in the country. A charitable trust received $ 2.4 billion in company shares from the founding team of Huang and PDD last year, in addition to their other charitable contributions.

Others top billionaire who have loosed a significant amount this year

According to the Bloomberg Index, six of the ten billionaires who have experienced the greatest declines in net worth this year are from China. There are several examples, including Zhong Shanshan, chairman of the bottled water company Nongfu Spring Co, which suffered a $ 18 billion loss, Hui of the beleaguered developer Evergrande, and Pony Ma of Tencent, whose fortunes have plummeted by more than ten billion dollars.

Aside from those six, Jack Ma, the co-founder of Alibaba, has suffered a $ 6.9 billion loss this year.