Trump behind Ant IPO suspension? Ant IPO has been cancelled at Shanghai Stock Exchange which was about to be the world’s largest IPO. So, what went wrong? According to Reuters, Trump administration has put on hold an effort to blacklist Ant Group Co Ltd, the massive Chinese financial technology company.
Ant Financials started under Alibaba Group, and currently operates as a separate entity.
Ant Group has officially confirmed that its listing has been suspended by Shanghai Stock Exchange. Since then the Jack Ma founded Alibaba shares have seen a slumped up to 8 percent amid the bustle. For now, the Ant Group IPO remains suspended.
Ant Group IPO Cancelled: Trump Behind Ant IPO Suspension?
Reuters have reported that the Ant Group IPO suspension has to do something with the Trump administration. It also reported that the US State Department had submitted a proposal to add Ant Group to a trade blacklist. It’s been done in order to deter US investors from taking part in the Ant IPO.
The Ant Group initial public offering was expected to rake in a record $37 billion, the highest for any company ever.
Ant Group IPO was scheduled to happen today in both Shanghai and Hong Kong stock exchanges. Well, now it stands suspended before becoming the world’s largest-ever stock market debut.
As per the development, HK President Michael Evans urged Commerce Secretary Wilbur Ross after the call from the US to reject the Ant IPO bid in a phone call, as per Reuters.
Ant is the largest mobile payments company in China. Apart from holding stakes in different financial companies across the globe, the firm offers loans, payments, insurance and asset management services over apps. 33 percent in the company is owned by Alibaba, the Alibaba group is controlled by founder Jack Ma.
Ant IPO Suspension: What Went Wrong?
Ant IPO suspension is majorly due to problems in regulations. The firm is subject to a certain level of restrictions on capital and leverage as banks. Jack Ma, the founder and majority stakeholder in Ant was summoned to a rare joint meeting on Monday with the country’s central bank. It also included three other top financial regulators.
Said to be the world’s largest IPO ever, investors will now again start to re-evaluate Ant’s IO price.
While everybody is valuing it as a tech company, investors will have another chance now to value it as a financial services firm and assess whether it actually values at this level offering such immense growth potential.
The other big reason behind Ant’s IPO suspension could be strict scrutiny. Recently Jack Ma criticized the local and global regulators. He blamed the bodies for not focusing on development and opportunities for the young. He also criticised the Basel Accords at a Shanghai conference last month calling it a club for the elderly .
Ant initiated the process of listing on the STAR board in Shanghai last year. Ant IPO attracted at least $3 trillion of orders from individual investors for the dual listing at the Hong Kong Stock Exchange and Shanghai Stock Exchange. At the Shanghai IPO, institutional investors subscribed Ant for over 76 billion shares, more than 284 times the initial offering.