Input 2020.12.28 14:41 | Revision 2020.12.28 14:43
Share price plunges despite measures to expand treasury stock purchase
Ant Group’s IPO suspension, the aftermath of strengthening antitrust regulations
Alibaba’s market capitalization, which has been identified as an “anti-monopoly company” by Chinese regulators, has decreased by $260 billion (285 trillion won) in the last two months. The assets of Ma Yun, the founder of the company and China’s No. 1 money maker, also evaporated $12.7 billion (14 trillion won).
According to the British Financial Times (FT), Alibaba’s stock price has fallen by more than 25% since the end of October, reducing its market cap by $260 billion. Ma’s personal assets also decreased by about 14 trillion won from $62 billion to $49.3 billion.
In early November, after Ma Yun criticized China’s financial supervisory practices of being like a pawnshop, the IPO of the Fintech subsidiary Ant Group was suddenly stopped, and a draft for strengthening the antitrust laws targeting Alibaba was announced. Last week, an antitrust investigation into Alibaba began.
The previous day, the People’s Bank of China revealed the details of the interview with the executives of Ant Group, saying, “Return to the payment business, which is the main business, and requested to submit improvement plans for business areas other than payment.” Although it did not mention the dissolution of the company, it is expected that it will be difficult to resume the IPO for the time being due to the need for significant restructuring.
The enterprise value of Ant Group is also expected to be significantly lowered from the estimated size of 300 billion yen (329 trillion won) just before the IPO. Citing experts, FT said it was unclear whether Ant Group’s restructuring plan would satisfy regulators and whether Ant Group should quit or sell its consumer finance business.