Who's lost more wealth than anyone this year? No, it's not Bill Hwang who famously lost $20 billion in 2 days. It's Colin Huang, the founder of Chinese e-commerce platform Pinduoduo ($PDD). Huang’s fortune has dropped by more than $27 billion after the company’s stock plunged as China cracked down on its internet giants.
It’s the starkest example of how the tide has turned for China’s billionaire class as President Xi Jinping calls for “common prosperity” and reins in the country’s private-sector companies. PDD is among the tech giants that have been pledging current and future corporate profits to invest in philanthropy projects.
PDD is more vulnerable to the crackdown compared to those peers with mature and profitable models like Alibaba and Tencent. PDD’s American depositary receipts have dropped 44% this year, compared with a 33% decline for Alibaba & 20% decline for Tencent.
Huang, who owns 28% of PDD, founded the company in 2015 and quickly built it into an e-commerce giant by pioneering community buying. The company’s market value reached a peak of $178 billion before falling to about $125 billion.
Short Squeez Takeaway: Colin Huang is probably not losing much sleep over the recent drop in his net worth. He is still worth a cool $35 billion. But with President Xi piling on the pressure on big tech to close the wealth gap, his fortune could shed a few more billion.