Bridgewater Associates founder Ray Dalio, perhaps China’s biggest bull on Wall Street, unloaded his firm’s entire stake in e-commerce giant Alibaba amid a fire sale of its holdings in U.S.-listed Chinese stocks.
The move is notable given Dalio has been an increasingly outspoken champion of Beijing and its one-party leadership ever since he first visited the country in 1984, even sending his son Matt to live in the country for a year a decade later.
Last November, Dalio launched what is believed to be the single biggest fundraising in China at the time, collecting the equivalent of $1.25 billion from Chinese investors and eclipsing a rival offering from BlackRock, the world’s largest asset manager.
Soon afterward he found himself in hot water after defending the regime’s attempts to silence tennis player Peng Shuai as not unlike that of a strict Confucian parent, forcing him to issue a mea culpa on LinkedIn.
His continued courting of the authoritarian country prompted Wall Street’s most vocal Beijing critic, Kyle Bass, to suggest that “maybe Ray should move to China.”
Yet Dalio’s hedge fund took the unusual step of selling its 7.5 million American depositary shares (ADSs) in Alibaba, which operates popular Chinese online sites like Tmall and Taobao. Each ADS equates to eight ordinary shares of the Amazon competitor.
According to its 13F filing with the Securities and Exchange Commission, Bridgewater also liquidated its positions in four other Chinese stocks, including fellow e-commerce retailer JD.com and ride-hailing giant Didi.
Increased Sino-U.S. Tensions
Why exactly Dalio exited his holdings from one quarter to another is unclear.
He has not commented on the reasoning, and the 13F filing only gives a snapshot of a portfolio manager’s holding on the final day of the quarter.
Moreover he notably retained his shares in Chinese tech giants Tencent and Baidu with only minimal changes.
Dalio’s decision comes amid a slowdown in the Chinese economy prompted by an ongoing bust in its all-important real estate market and increased Sino-U.S. Tensions over Nancy Pelosi’s visit to Taiwan, emboldening the local independence movement.
The hedge fund manager cautioned last week before news of his stock sales broke that he was very concerned about the crisis in the Taiwan Strait.
“What is happening now between the U.S. And China over Taiwan is following the classic path to war,” he wrote.
Even Wall Street is caught up in the rivalry between Washington and Beijing.
U.S. Securities regulators could force Chinese companies to delist from U.S. Financial markets if they cannot independently verify the quality of their accountants’ audits, affecting potentially $1.3 trillion in stocks.
As a result, Uber peer Didi already withdrew from the main board on the New York Stock Exchange and since mid-June only trades over the counter.
More recently the issue of delisting came up last month when a no-name Hong Kong company with annual revenue of just $25 million warned investors it might have only a short spell on the NYSE because its auditors in mainland China are out of reach of U.S. Jurisdiction. It went on to briefly become more valuable than Alibaba itself just days after it went public.