In The World's Largest Wealth Drop, A Chinese Billionaire Loses $27 Billion

Colin Huang of Pinduoduo Inc has lost almost $27 billion in fortune, according to the Bloomberg Billionaires Index, after the company's shares plummeted as China cracked down on its online behemoths.

In The World's Largest Wealth Drop, A Chinese Billionaire Loses $27 Billion
In The World's Largest Wealth Drop, A Chinese Billionaire Loses $27 Billion

Colin Huang, the founder of Pinduoduo Inc, a Chinese e-commerce company, has lost more money this year than anyone else on the planet. Huang's fortune has plummeted by more than $27 billion, according to the Bloomberg Billionaires Index, as the company's stock has fallen as China cracks down on internet behemoths. That's the biggest decline among the 500 members of the index, much larger even than the roughly $16 billion lost by China Evergrande Group Chairman Hui Ka Yan, whose real estate empire is struggling under a pile of debt.

As President Xi Jinping calls for "shared prosperity" and reins in the country's private-sector enterprises, it's the clearest indication of how the tide has flipped for China's billionaire class. Pinduoduo's (PDD) stock has dropped more this year than Alibaba Group Holding Ltd or Tencent Holdings Ltd. 

According to Kenny Ng, a securities strategist at Everbright Sun Hung Kai Co in Hong Kong, PDD is "more exposed to the crackdown compared to those peers with mature and profitable models" like Alibaba and Tencent. "This is the primary reason for the company's stock performance lagging behind that of other tech firms." PDD's spokesperson did not respond to inquiries for comment.

Pinduoduo's American depositary receipts have dropped 44% this year, compared with a 33% decline for Alibaba's ADRs. Tencent's shares have slid 20% this year in Hong Kong.

Huang, who owns 28% of PDD, founded the company in 2015 and quickly built it into an e-commerce giant by pioneering community buying. PDD's annual active users climbed to 788 million in December, exceeding the 779 million users at Alibaba's online marketplaces.

The company's market capitalization peaked at $178 billion before dropping to around $125 billion. Last month, it announced its first quarterly net profit as a public business. Huang, who is now worth $35 billion, stood down as chairman in March after leaving his position as CEO last year. 

PDD is one of the tech behemoths that has pledged to invest present and future corporate revenues in philanthropic projects as part of President Xi's push to bridge China's wealth gap. It said last month that it will set aside $1.5 billion in earnings to promote the country's agricultural development. Before that, Huang and PDD's founding team also gave $2.4 billion in the company's shares to a charitable trust last year.

Of the 10 billionaires with the biggest net worth declines this year, six are from China, according to the Bloomberg index. They include Zhong Shanshan, the chairman of bottled water company Nongfu Spring Co, which has lost $18 billion, Hui of the besieged developer Evergrande, and Tencent's Pony Ma, whose fortune has dropped by more than $10 billion.

Apart from those six, Jack Ma, the co-founder of Alibaba, has shed $6.9 billion in wealth this year.