How Much Did Jack Ma’s Speech Cost Ant Group? About $230 Billion
Ant Group, co-founded by Jack Ma and affiliated with Alibaba Group, has announced a share buyback valued at $78.5 billion, a significant decline from its previous valuation before its IPO was halted by Chinese regulators.
The combination of losses in market capitalization for Ant and Alibaba amounts to approximately $877 billion, attributed to the regulatory crackdown initiated by Ma’s critical speech towards Chinese financial regulators and banks in 2020.
Chinese regulators recently imposed fines totaling $984 million on Ant and its subsidiaries for violations related to consumer protection and corporate governance, which analysts believe marks the end of the regulatory “overhang” on the Chinese internet sector.
The removal of regulatory uncertainties is expected to benefit Alibaba, Tencent, and Chinese fintech firms, as it provides better visibility on the sector’s outlook and unlocks their valuations.
Ant’s proposed share repurchase involves up to 7.6% of its equity interest, and Alibaba is considering whether to participate in the buyback.
Following the conclusion of the regulatory crackdown, analysts speculate that Ant may revive its IPO plans, which were abruptly canceled in November 2022, just days before its scheduled listing and after it had priced its shares.
Ma’s criticism of international financial regulations and the Chinese financial system led to a series of regulatory actions against his business empire, including the cancellation of Ant’s IPO.
The regulatory crackdown extended beyond tech companies, impacting various industries and erasing trillions of dollars from the market value of Chinese firms globally.
Despite the easing of the regulatory campaign, Alibaba’s stock price remains significantly lower than its peak in 2020, resulting in a substantial decline in its market capitalization.
