Chinese stock market influencers are helping to quell Evergrande-related protests by pushing positive messages about the company's future
Advertisement
Cheryl Teh
Sep 29, 2021, 15:28 IST
Evergrande could be evading a full-scale social media firestorm due to positive messaging being pushed by Weibo-based stock market influencers intent on reassuring their audience of Evergrande's stability.
Jakub Porzycki/NurPhoto via Getty Images
Real-estate giant Evergrande is teetering on the verge of collapse, but has managed to fly below the radar on Chinese social media for over a week.
This might be due to positive messages about the company being pushed on Weibo comment threads - akin to subreddits - penned by stock market influencers and analysts.
An expert told Insider that these messages could be helping to quell discontent and pacify investors less in-the-know about Evergrande.
Advertisement
The financial troubles of Chinese real-estate juggernaut Evergrande are likely far from over, but social media influencers in China may be helping to calm the storm.
That Evergrande Chairman Xu Jiayin remains immensely wealthy amid Evergrande's financial struggles has angered Chinese social media users on the country's Twitter-like platform, Weibo. Weibo users were up in arms about a letter Xu sent to employees on September 21 that said the company would soon "walk out of the darkness" and encouraged staff to rally and work hard to make that happen.
Insider saw the Evergrande-letter topic thread, which is comparable to a subreddit, rake in more than 100,000 comments within the first 30 minutes of it being posted. Some posters on the topic thread called Xu "delusional" and even accused him of cheating workers of their paychecks.
However, in the week since that letter was published, Xu and Evergrande have managed to avoid being listed on Weibo's top trends, suggesting that chatter about the company has dropped off.
Advertisement
That may be, in part, thanks to a concerted campaign by prominent Chinese financial influencers to quell the panic.
Positive news about Evergrande is being pushed by stock market influencers
Weibo finance influencers provide financial advice to their followers and post periodic updates on the stock market
However, this topic thread has spawned hundreds of discussion threads, with people reassuring each other about the state of Evergrande's financial situation despite the company teetering on the verge of collapse.
"It seems like Evergrande will be completely fine, and can pull through! Xu Jiayin has used his leverage to really rescue the company, and I'm guessing the storm will pass soon," wrote Weibo finance and tech influencer Chu Di Shaozhu, who has 196,000 followers on the platform.
Advertisement
Another Weibo user, Jing Chu Gong Zi, was also seen pushing a message this week that Evergrande, despite its liabilities, still bore a lot of investment potential, positioning that the company still had ways of "squeezing out some money" to deal with its crisis. Jing has 950,000 followers on the platform and brands himself as a finance news commentator.
Hu, Chu, and Jing did not immediately respond to a request for comment from Insider.
Stock market influencers and their encouraging Evergrande messages are helping to pacify less-savvy investors: expert
Giles Coghlan, chief currency analyst at trading firm Henyep Capital Markets, told Insider that social media influencers are capable of swaying public opinion, but only to some extent.
Common prosperity refers to Chinese leader Xi Jinping's push for wealth distribution and criticism of "excessive incomes."
Advertisement
Coghlan added that influencer accounts posting reassuring messages would undoubtedly help to quell discontent and pacify smaller investors who might be less in the know about the state of the market.
The currency analyst said he wasn't sure whether the Chinese government was directly involved in promoting these finance influencers or massaging their messages, but noted that "ultimately, the government will encourage this posting of positive messages."
Coghlan believes the government will do everything it can to prevent a total Evergrande implosion.
"It will divide, cut debts, and manage the situation as best as it can without allowing a full market collapse," he said, because ultimately, "the idea of 'common prosperity' does not sit well as a message if bringing it about results in a market collapse. Stability is in everyone's best interests."
{{}}
NewsletterSIMPLY PUT - where we join the dots to inform and inspire you. Sign up for a weekly brief collating many news items into one untangled thought delivered straight to your mailbox.
WHO employees reportedly sexually abused 50 women in the Congo during Ebola outbreak
Beleaguered real-estate giant Evergrande's $1.8 billion lotus-shaped soccer stadium is partially built and in shambles amid the company's impending collapse
Top unanswered questions about Gabby Petito's death and Brian Laundrie's disappearance