Due to the intervention of the Chinese government, the record IPO of fintech group Ant Group has been delayed.
On the evening of November 3, two days before the record IPO of Ant Group on the Shanghai and Hong Kong stock exchanges, the company suddenly announced to postpone the IPO.
According to the Bloomberg, the expected IPO on the Shanghai Stock Exchange is postponed when billionaire Jack Ma – who directly runs the group – is summoned by relevant agencies. Representative of Ant Group said the listing in Hong Kong will also be suspended after the announcement of suspending the listing in Shanghai.
Ant Group is considered as the last big start up of billionaire Jack Ma. Photo: WSJ.
The IPO was halted just a few days before the scheduled schedule, causing the future of Ant Group to be questioned. Before that, the finance company spun off from Alibaba is expected to have a record IPO worth the next 35 billion USD, helping Ant Group reach a market cap of approx 315 billion USD on record, larger than both JPMorgan Chase and Goldman Sachs banks.
This information caused the price of shares of Alibaba Group traded in the US to drop 8.13%, equivalent 63 billion USD, according to the data of Bloomberg. Alibaba currently holds about a third of the shares in Ant Group.
According to the Bloomberg, billionaire Jack Ma became the target of a speech calling for loosening the law so that startups can be creative. At a conference in Shanghai late last month, he compared the Basel Agreement to the stringent capital requirements for banks as a “club for the elderly”.
The billionaire was summoned to a secret meeting on November 2 with the Central Bank of China and three other top financial regulators on the matter. During the meeting, Jack Ma accepted the warning that Ant Group will be controlled equivalent to ordinary banks, without exception.
“It is a pretty bad forecast when a company is preparing to launch the world’s largest IPO to raise billions of dollars from global investors but is suddenly postponed just before going public,” Yu Tianjiao, an analyst at Sanford C. Bernstein (Hong Kong) said.
“In the long run, investors who once valued Ant Group as a technology corporation will reassess its value. They will evaluate the company as a financial service and review the growth potential of Ant “, the expert said.
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