Alibaba Employees Morale Slumps: Stock Below IPO Price


Yesterday CEO Daniel Zhang was wearing his best brave face, when he told his Alibaba employees to “forget about the share price and focus on the job.” It was he who encouraged them to invest in their employer, and now their morale (and we suspect his too) is suffering the consequences of stock value dropping below the initial purchase offering IPO price.

Daniel Zhang Orders Alibaba Employees to Close Ranks

Alibaba employeesAlibaba’s shares are in swift retreat. In November, they breasted $119.00 but fell back to $58.14 on Monday, before rallying slightly to close at $65.86. Daniel Zhang’s words rang loudly when he said to his employees, “Alibaba’s values are reflected in the pursuit of our dreams and to create value for our customers. Our values do not waver with the fluctuations in stock price.” All that seemed missing was a Churchillian, “We shall fight them on the beaches …”

Alibaba Employees Advised to Adopt a 102-Year View

In Chinese culture, the radical number 102 represents a rice paddy or a field where crops may grow and farmers’ fortunes flourish. Zhang went on to rally Alibaba employees by reminding them that they are “not just fighting this one battle; we are in it for 102 years to win the war”. He was recalling Jack Ma’s claim that the company would exist for at least 102 years, last year.

The Next Assault Could Be Just Around the Corner

Alibaba is the second high profile technology company to have seen its shares fall below their IPO price. The only other one was Twitter. Alibaba’s misfortunes are driven by an unstable Chinese regulatory environment, recent earnings forecasts missed, and an ongoing failure to root out counterfeit goods on Taobao, its battleship online ecommerce platform.

This September, the lock down expires on stock resales by large investors and certain Alibaba employees. Will they listen to Daniel Zhang’s plea? I suspect they have to, if they want to keep their jobs.

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Social Brand Watch (SBW) is a collection of experts in digital, mobile and social media in China. SBW was created to complement Resonance's China Social Branding Report, a bi-weekly report focusing on modern marketing methods of the world's top brands in China.

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