By Chavi Mehta and Josh Horwitz

(Reuters) – China’s Alibaba Group Holding Ltd beat estimates for third-quarter revenue on a pandemic-driven jump in e-commerce, but its shares dropped amid regulatory heat for founder Jack Ma’s business empire.

It also announced a bond sale worth as much as $5 billion though sources have said plans for the fundraising were in the works before the regulatory clampdown.

Ma’s current woes stem from an Oct. 24 speech in which he blasted China’s regulatory system, leading to the suspension of his Ant Group’s $37 billion IPO just days before the fintech giant’s listing.

Regulators have since launched an anti-trust probe into the tech sector, while tighter regulations for Ant are also being considered.

Ma, who has been keeping an uncharacteristically low profile these past three months, was also conspicously snubbed this week by his omission in a state media list of entrepreneurial leaders.

Alibaba CEO Daniel Zhang said changing regulations for internet and fintech firms in China presented a near-term challenge.

“We regard this as important opportunities for re-assessing and improving business practices,” he told an earnings call.

Alibaba also said it was “unable to complete a fair assessment” of the impact that Ant’s stalled IPO will have on the company. Zhang said, however, that any potential reduction in consumer credit offerings from Ant would not have an impact on Alibaba’s e-commerce business.

Shares in Alibaba dropped 4% in Hong Kong on Wednesday, having closed down nearly as much on the New York Stock Exchange.

Alibaba’s total revenue rose 37% to 221.1 billion yuan ($34.2 billion) in the three months ended Dec. 31, above analysts’ estimates of 214.4 billion yuan, according IBES data from Refinitiv.

Core commerce revenue from its main e-commerce sites rose 38% to a record high of 195.5 billion yuan, powered by the company’s Chinese operations.

In November, Alibaba’s China-focused Singles Day sale – the world’s biggest online shopping event that eclipses the revenues generated on U.S. shopping holidays Black Friday and Cyber Monday – registered sales of $74 billion.

Net income attributable to ordinary shareholders was 79.4 billion yuan, or 28.85 yuan per American depository share, compared to 52.3 billion yuan, or 19.55 yuan per ADS, a year earlier.

Revenue for cloud computing rose 50% year on year, hitting 16.12 billion yuan, with the division posting positive EBITA for the first time.

(Reporting by Chavi Mehta in Bengaluru and Josh Horwitz in Shanghai; Additional reporting by Scott Murdoch in Hong Kong; Editing by Sriraj Kalluvila, John Stonestreet and Edwina Gibbs)