- Fintech Ant Group was ordered by Chinese regulators to restructure into a financial holding company, and Alibaba (NYSE:BABA), which holds an Ant Group stake, had to pay a record $2.75B antitrust fine.
- Reuters sources say the combination of regulatory actions has soured investors on Ant's potential IPO, questioning the company's potential profitability and valuation.
- Last year, Ant was valued at $315B ahead of its blockbuster IPO dual listing, which regulators pulled at the last minute.
- Earlier this year, reports suggested that investors were viewing Ant's valuation at around $200B based on its 2020 financial performance.
- “We were initially taking that position early on, thinking Ant would eventually IPO. It is a significantly different opportunity now. There is no hurry to jump into investing in a bank," Bay Street Capital Holdings founder William Huston tells Reuters.
- Separately, subsidiaries of Alibaba and 360 Security Technology were fined $319,470 by Chinese regulators for false advertising on the UC Browser. The fine amount is pocket change for Alibaba, but the action shows that internet scrutiny isn't letting up.
- Related: Early last month, Ant Group's then-chairman (now CEO) Eric Jing told employees the company still plans to go public at some point.