According to Bloomberg, shares of seven Chinese tech companies collapsed after the announcement of charitable donations.

Analysts believe Chinese tech tycoons have suffered from the government's “common prosperity” policy. At that time, seven PRC technology corporations declared charitable pledges. Bloomberg noted that fact further led to a drop in their stocks.

Alibaba Group was one of the tech giants affected by the donations. On Thursday, September 2, the company announced that it would allocate $15.5 billion over the next five years to the development of small technology firms. After that, Alibaba Group's shares traded on the New York Stock Exchange dropped by 0.7% to $172 apiece. At the same time, the tech giant’s shares rose on the Stock Exchange of Hong Kong. 

Pinduoduo has suffered greatly with its shares plunging after the announcement of donations. This year, in March, they fell by 5.1% to $142 apiece. Lenovo shares faced the same problem. In April 2021, they lost 2.4% after the charitable donation.

Stocks of such IT giants as Xiaomi and Offcon Education were not so much hurt by the charity. They went down 0.5% and traded at $3.6 and $5.1 respectively. Notably, this year Chinese billionaires have donated $5 billion to the country’s welfare. Xi Jinping’s statements caused the growth of financial aid. The Chinese leader previously stressed the importance of "common prosperity," that is, reducing the income gap between the rich and the poor.