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World’s largest IPO postponed – parent company shares crash

by Financial Economy

World’s largest IPO postponed – parent company shares crash. It was supposed to be a historic stock market spectacle, but the Chinese Ant Group’s debut was canceled at short notice. The parent company Alibaba is now being punished by investors for it.

World’s largest IPO postponed – parent company shares crash

The surprising cancellation of the IPO of Ant, the financial arm of the Chinese online giant Alibaba, has sent Alibaba’s share price plummeting. In New York the price fell by 8.13 percent by the end of trading, in Hong Kong it collapsed by ten percent at the start of trading on Wednesday, but then recovered slightly. The Ant group with the Internet payment service Alipay has canceled the IPO planned for Thursday for the time being.

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With a volume of almost 30 billion euros, Ant’s IPO in Shanghai and Hong Kong should be the largest of all time. The reason for the decision is apparently pressure from the country’s control authorities. Alipay had previously been criticized from the state-controlled banking sector; Alibaba founder Jack Ma was summoned by the authorities. The Shanghai Stock Exchange said there is a risk that Ant will not be able to meet the “terms” of the IPO and the “information requirements”.

Nuvest Capital’s Dave Wang said the main reason regulators are uncomfortable is that fintechs like Ant are currently under less scrutiny than state-run banks – putting them at risk to the system. The state-controlled “Financial News” warned on Sunday that Internet companies like the Ant group would become too big and that this could lead to problems.

Alipay is the leading online payment service in China. According to the company, more than 700 million people in China use it every month; According to this, more than 14.4 trillion euros are transferred annually. Alipay also grants loans to households and smaller companies, offers asset management and insurance and thus extends into the state-controlled financial sector.

Alibaba founder Ma recently criticized an economic forum in Shanghai for the fact that the supervisory authorities are clumsy and slow down innovations in the field of digital financial services. According to the financial news agency Bloomberg, the cancellation of the IPO and the Alibaba share price crash brought Ma now at least temporary losses in value of around three billion dollars.

Source: https://www.spiegel.de/

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