Chinese fintech giant Ant Group to buy back shares at 70 per cent lower valuation than at scrapped IPO

Name: What is Jack Ma’s Ant Group and how does it make money?
Uploaded: 2023-07-08T09:28:01.000Z
Duration: 3 min 4 s
Description: What is Jack Ma’s Ant Group and how does it make money?

Ant’s planned equity repurchase scheme would value the company at about US$78.5 billion, the company said in a statement on Saturday

That is almost 70 per cent lower than the US$280 billion market capitalisation Ant fetched in 2020 for its scrapped IPO

3-MIN READ3-MIN

Ant Group said it will transfer repurchased stock into the company’s staff incentive plan to attract talent. Photo: AP

Bloomberg

Published: 5:28pm, 8 Jul 2023

Jack Ma-backed Ant Group is proposing to buy back as much as 7.6 per cent of shares in an effort to retain talent and provide a chance to cut stakes for investors ensnared by a years-long regulatory crackdown at the financial technology giant.

Each investor would be allowed to sell up to 7.6 per cent of their equity rather than cashing out completely, according to a person familiar with the matter, asking not be identified discussing private details of the arrangement.

Ant’s planned repurchase of the equity would value the company at about 567.1 billion yuan (US$78.5 billion), the company said in a statement on Saturday. That is almost 70 per cent lower than the US$280 billion market capitalisation it fetched in 2020 for the scrapped initial public offering (IPO).

Chinese regulators are wrapping up a two-year crackdown on the country’s once-freewheeling technology giants after slapping more than US$1 billion in fines on Ant and Tencent Holdings on Friday. Ant has completed its overhaul ordered by Beijing, pinching profitability and sapping growth at a sprawling platform that spanned lending and insurance to asset management.

03:04

What is Jack Ma’s Ant Group and how does it make money?

Giving some money back to shareholders could help Ant shift its focus to building business operations, easing pressure from pre-IPO investors seeking an exit due to its valuation slump. Global funds have grappled with how to assess their investments in Ant made in 2018 when the company was valued at about US$150 billion.