Finance

Fidelity Slashes Ant Group Valuation, Posing A Bummer For Alibaba

01/27/2023
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  • Fidelity Investments again slashed Alibaba Group Holding Limited’s (NYSE: BABA) fintech affiliate Ant Group Co’s valuation more than two years after China blocked the fintech giant’s initial public offering plans.

  • Fidelity pared its estimate for Ant by about 9% to about $63.8 billion as of the end of November from the end of May, Bloomberg reports.

  • Ant was worth $235 billion just before China suspended Ant’s IPO in November 2020.

  • China quashed Ant’s $34 billion-plus IPO in 2020 at the last moment, forcing the technology firm to restructure as a financial holding company regulated by China’s central bank.

  • Ant revamped its business to comply with the government directive while awaiting a green light to apply for a financial holding company license.

  • Recently, China allowed Ant’s consumer lending affiliate to increase capital, and founder Jack Ma agreed to cede control of Ant.

  • Ant promoted 20-year veteran Sophie Wu Minzhi to Chief People Officer, replacing Sam Zeng Songbai, starting from January 1.

  • Minzhi’s career at Alibaba covered several business units before joining Ant in August 2021.

  • The promotion came after Chongqing Ant Consumer Finance won the permit to raise 10.5 billion yuan ($1.5 billion), the first approval since China foiled Ant’s IPO. Ant can expand the capital base of Chongqing Ant to 18.5 billion yuan from the current 8 billion yuan.

  • However, Ant’s profit fell 63% in the June quarter due to the government crackdown and China’s economic slowdown.

  • Ant Chair Eric Jing shared the company’s ambitions to go public, but there has been no update regarding the IPO.

  • Recently, China’s top leadership renewed its pledge to support its platform economies and encourage their role in economic growth and job creation after a two-year crackdown on the platform economy.

  • Price Action: BABA shares traded lower by 0.95% at $119.43 premarket on the last check Friday.

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This article originally appeared on Benzinga.com

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Source: https://finance.yahoo.com/news/fidelity-slashes-ant-group-valuation-131227025.html