Jack Ma’s e-commerce | Business Upturn

Wall Street Journal reports actual reason of China’s shut down Alibaba IPO

Arnav Dogra — Wed, 17 Feb 2021 08:22:24 +0000

When Jack Ma’s historic IPO release had been shut down at the last moment by Chinese regulators last year, it was being speculated that this was a strong comeback that the Chinese leader Xi Jinping had delivered after Jack Ma’s public criticism of China’s economic structures.

Ma had in a public speech, criticized China’s regulation system saying that it was preventing innovation and was mediocre compared to international banking rules.

However, Chinese government officials and financial experts had presented that the real reason for the suspension of the IPO was the Party’s scepticism of the complex ownership structures of the company, which they have said would go on to allow some politically ambitious individuals in China to increase their assets and power, thereby posing as a threat to the leadership of Xi Jinping.

According to the report by the Wall Street Journal, the decision to shut down this IPO was not a result of China’s intolerance towards criticism but rather its cautiousness towards powerful figures.

These figures, along with Jack Ma and his prime subordinates, would have been able to add billions of dollars to their net worth’s overnight in an IPO that would’ve resulted in the company being valued at $300 billion.

Alibaba founder Jack Ma’s net worth is whopping; Everything you need to know!

Sarthak Yadav — Tue, 05 Jan 2021 18:47:37 +0000

The Bloomberg Billionaires Index reported that Jack Ma founder of Alibaba and AliExpress has lost about $11 billion, dropping his net worth to $50.1 billion. Last year the fortune of the Chinese billionaire reached $61.7 billion.

In November 2020, Ant Financial the fintech arm of the Jack Ma owned tech conglomerate was set to raise $34 billion jointly on its listing on the Shanghai and Hong Kong stock exchanges making the biggest stock market debut in history.

These plans fell through after Chinese regulators launched a last-minute antitrust investigation and suspended the transaction. This caused the shares of Alibaba, a company that owns 33% of Ant Group, to fall and with them the fortune of the businessman. Jack Ma was on the verge of becoming the richest man in the Asian country again.

As reported by BBC the Hong Kong Stock Exchange commented that Ant Group “may not meet standards for listing and transparency requirements.” He also suggested that “recent changes” in the regulation of digital finance could have become an obstacle.

The State Administration for Market Regulation (SAMR) declared in a statement that they are investigating Alibaba group for “suspicion of monopolistic conduct.”

The only information brought to the public domain is that the investigation is related to the exclusivity policy of the group, which forces merchants to sell only on Alibaba and prevents them from doing so on other rival platforms.

The Central Bank of China ordered a reorganization of operations for Ant Group to rectify its insurance, loan and wealth management services.

Ant Financial has pumped billions of dollars across several companies in India like, Paytm, Snapdeal, Zomato, Big basket etc. The investment is close to around $2.7 billion.

Alibaba shares drop by 9% as buyback plan fails to halt stock

Divya Joyce — Tue, 29 Dec 2020 09:41:40 +0000

Alibaba shares dropped 9% to lowest since June on Monday, as the firm’s upsized $10 billion buyback programme failed to ease concerns about a regulatory crackdown on co-founder Jack Ma’s e-commerce and financial empire. A sharp sell-off over two sessions has knocked almost $116 billion off the tech giant’s Hong Kong-listed shares.

“The antitrust investigation into Alibaba has yet to specify the penalties, which is worrying investors a lot,” said Zhang Zihua, a chief investment officer of Beijing Yunyi Asset, adding a probe outcome could “greatly change” the company valuations.

The downward spiral intensified when Chinese regulators announced on Thursday the launch of an antitrust investigation into Alibaba and said they would summon its Ant Group affiliate to meet. Alibaba’s U.S. shares sank more than 15% during the day.

Putting investors more on edge was news over the weekend that China’s central bank had asked Ant to shake up its lending and other consumer finance operations.

Last month, Chinese regulators abruptly suspended Ant’s blockbuster $37 billion initial public offerings in Shanghai and Hong Kong, which was on track to be the world’s largest, just two days before its planned debut.

“The new regulations are hurting big internet platforms, so you see Tencent and other tech companies are also seeing their share prices going down,” said Li Chengdong, a Beijing-based tech analyst.

“Alibaba now is the target of the regulators so the reaction is stronger.”

These developments are part of a crackdown on monopolistic behaviour in China’s booming internet space in general, but Ma’s business empire in particular after he publicly criticized the regulatory system for stifling innovation.

Regulators have warned Alibaba about the so-called “choosing one from two” practice under which merchants are forced to sign exclusive cooperation pacts preventing them from offering products on rival platforms.

The State Administration for Market Regulation said on Thursday that it had launched a probe into the practice.

The gloom due to the regulatory crackdown overshadowed Alibaba’s decision, announced on Sunday to raise its share repurchase programme to $10 billion from $6 billion, effective for a two-year period through the end of 2022.

Alibaba shares could trade lower in the near term due to the “regulatory overhang”, Nomura said in a note on Monday.

But the cheaper value will be attractive for long-term investors, Nomura added as it kept a “buy” rating on Alibaba’s U.S.-listed stock and retained a target price of $361. The stock closed at $222 on Thursday.