Alibaba Loses Nearly USD 70 Bn in Market Cap as Ant Group Postpones IPO Plans
The double-listing application has been put off both in Shanghai and Hong Kong due to regulatory considerations.
On the eve of its behemoth IPO, on November 3, the listing plans of Ant Group (688688:SH, 06688:HK) were put on hold on both Shanghai’s Star Market and Hong Kong bourse. Also, it is said that Ant CreditPay (Chinese: 花呗) and Ant Cash Now (Chinese: 借呗) are being divested from the group due to the requirement of 're-valuation of value.'
Late on November 2, a press release from China Security Regulatory Commission (CSRC) released the info that several state administratiors had interviewed the executives of Ant Group, including the actual controller, Jack Ma, the CEO Jing Xiandong and the president Hu Xiaоming, to discuss regulatory issues.
This might also be the reason for putting off the massive IPO. As an Internet company that deploys in the financial service industry, Ant Group's debut brings complex problems around supervision. Also, if the company goes public at the current valuation, the stock price will possibly drop, as stricter regulations are being put onto Internet fintech firms, something which ties up retail investors. It might be best, in the eyes of regulatory authorities, to postpone the plans so as to protect small investors.
The sudden news comes as a surprise, nonetheless. Alibaba (BABA:NYSE) opened 8% lower on Tuesday and it is actively running down, with around USD 67 billion in market capitalization lost.