Ant Group IPO Suspended By Shanghai Stock Exchange After Warning From Chinese Regulators

Topline

The Shanghai Stock Exchange said Tuesday that it will suspend the initial public offering of Ant Group because of changes in the regulatory environment, Bloomberg first reported Tuesday—the sudden decision from Chinese regulators puts Ant Group’s record-breaking IPO in jeopardy. 

Key Facts

Ant Group is the fintech arm of Chinese e-commerce giant Alibaba, cofounded by billionaire Jack Ma.

On Monday, Ma met with Chinese officials to discuss the increased regulatory scrutiny—including restrictions on capital and borrowing similar to bank requirements—Ant Group will face as it grows, Bloomberg reported. 

Ant Group had been planning to raise a record-setting $34.5 billion in a joint listing on the Hong Kong and Shanghai stock exchanges. 

It was scheduled to begin trading on both exchanges on Thursday, November 5.

The abrupt suspension of the listing is the latest development in the tense relationship between regulators that have sought to limit Ant Group’s exponential growth—and the risks associated with that growth—and Ma, who has criticized those regulators for quashing innovations in China.

Crucial Quote

“We cannot regulate the future with yesterday’s means,” Ma said in a speech last month, as reported by the Wall Street Journal. “There’s no systemic financial risks in China because there’s no financial system in China. The risks are a lack of systems.”

Key Background

Ant Group is the owner of Alipay, a popular Chinese mobile payment app that had more than one billion active users as of June 2020. Alipay can be used in nearly every aspect of a user’s financial life, including making purchases, borrowing money, investing, saving and even buying insurance. Alipay is also a popular option for businesses and more than 80 million merchants use the app in a single month.

Further Reading

China Suspends Jack Ma’s Ant Group Shanghai IPO After Warning (Bloomberg)

Ant Group Will Raise $34.5 Billion In Biggest IPO Ever (Forbes)

What We Learned From Ant Group’s New IPO Filing (Forbes)

Trump Administration Plans To Add China’s Ant Group To Trade Blacklist, Report Says (Forbes)

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