A seemingly innocuous post on an obscure social media platform by a Chinese billionaire CEO has sent shockwaves through the country's tech industry, and cost food delivery giant Meituan many billions in a mere few days in what seems a repeat of last year's Jack Ma "disappearance" saga.
Meituan CEO Wang Xing dabbles in literary classics, and wrote on social media a short poem comprised of just 28 Chinese characters from a 1,100-year old text about China's first emperor and his ill-conceived efforts to stamp out dissent, which included attempts to stifle intellectual debate and any criticisms of himself by burning books. Apparently this was too much for China's censors - as CNBC observes there were immediate and colossal repercussions: "Meituan has seen around $38.96 billion wiped off its value in the past two weeks as Beijing turns its regulatory scrutiny on the Chinese food delivery giant."
The poem which was posted to the social media platform Fanfou (akin to the more popular Weibo) was seen as a veiled criticism of Xi Jinping, causing Wang to later delete the post on May 9th while attempting to clarify that the posting of the poem was just intended to playfully highlight rivalries in business. He sought to assure there was no intended criticism of the government, and of course it was too late.
China’s State Administration for Market Regulation (SAMR) had already launched an investigation into "suspected monopolistic practices" and the crackdown began - notably being SAMR's merely second investigation into a domestic tech firm, with the first being Alibaba.
On top of Meituan seeing its shares plunge some 16% over the past two weeks, finding itself center of an ongoing global tech rout caused in large part by signs of China's growing regulatory crackdown, it's now facing immense fines for alleged malpractice related to monopolistic practices. Recall that Alibaba was fined 18.23 billion yuan ($2.8 billion).
Scrutiny is now coming from other regulatory corners as well, notably the Shanghai Consumer Council, which is said to be examining unfair practices related to merchant fees.
The US tech scene could use more controversy over 8th century poetry. https://t.co/qymXCc2Qp1— Zach Seward (@zseward) May 10, 2021
As for the social media post which unintentionally kicked off Meituan being the next to find itself in the crosshairs, perhaps the sting in it felt from Beijing involved the fact that the story ends with the emperor being overthrown by a pair of uneducated citizens.
One analyst, the Global CIO Office (in Singapore) Gary Dugan, articulated to Bloomberg just how on edge the Chinese tech market is at this moment: "Any investor in single stock names in China at present would hope that they do less social media philosophizing about the future and just focus on managing their businesses."