Shares of Alibaba (NYSE:BABA) were climbing today along with other Chinese stocks after The Wall Street Journal reported that the Chinese tech giant, along with Tencent and Baidu, will no longer be added to a Pentagon blacklist.
The Department of Defense had identified a dozen Chinese companies that it claims support Chinese military and intelligence operations, and the Trump administration has imposed a ban on owning such stocks, set to take effect this November. But after a debate with the Treasury Department, which feared economic fallout from including three of China's biggest tech companies, the trio will no longer be on the list.
As of 3:38 p.m. EST on Wednesday, Alibaba stock was up 5%, while Tencent had gained 3%, and Baidu, the smallest of the three, was actually down 0.9%. All three jumped around 2 p.m. when the news came out.
The Journal did not provide many details in its report, though it noted that the other nine companies the Pentagon had identified would be added to the blacklist. The news comes as the Trump administration is trying to wrap up policy priorities in its last week in office.
It also removes one significant cloud over Alibaba stock as shares have flailed in recent months. The Chinese government, seemingly fixated on revenge against Alibaba founder Jack Ma after he made derogatory remarks about government officials at an October conference, first blocked the IPO of Ant Group, Alibaba's former financial arm, and last month announced an antitrust investigation into Alibaba.
Ma has also been reported as missing, since he hasn't made any public appearances since October, but other sources have said he is "laying low" to avoid further public scrutiny.
The Trump administration has been particular hawkish toward China in trade and other areas, often using the country as a scapegoat. Biden is expected to take a different tack, though he still sees China as a rival.
Still, the news is unquestionably positive for Alibaba investors. While the stock may be suppressed until the antitrust investigation is resolved, looking at the business itself, the Chinese e-commerce titan seems like one of the best value stocks available these days.