Fintech giant Ant Group Co.’s valuation has been lowered again by global investors who bought private shares ahead of its suspended initial public offering. According to Bloomberg, Fidelity Investments lowered its estimate for Ant to $70 billion in late May. That’s down from $78 billion last June, and $235 billion just before Ant’s November 2020 IPO was torpedoed by regulators.
BlackRock lowered the figure to $151 billion in March from $174 billion, while T. Rowe Price Group cut it to $112 billion in May from $189 billion last year.
The problems for Ant and its investors are mounting. The company’s profit fell 17% in the March quarter amid a regulatory overhaul that has been ongoing for years. The $150 billion price tag is a necessary threshold. Investors such as Warburg Pincus, Canada Pension Plan Investment Board, Silver Lake, and Temasek Holdings Pte were reported to have invested in Ant at that price four years ago.
The Hangzhou-based company restructured its operations last year to meet a series of demands from Chinese regulators, including increasing its capital, curtailing its consumer lending business, and restructuring its management. Billionaire Jack Ma is considering relinquishing his control of 50.52% of the voting rights in the company, people familiar with the matter said.
In a July statement, Alibaba Group Holding Ltd. reiterated that Ma “intends to reduce his direct and indirect economic interest in Ant Group over time and after that limit it to a percentage not exceeding 8.8%.”
Ant’s chairman, Eric Jing, said last year that the company would eventually go public, but in June, the company said it had no plans for an IPO yet.
China’s campaign to rein in its technology companies began when Ant’s planned $35 billion initial public offering was thwarted. The crackdown has escalated into an assault on every corner of China’s technosphere as Beijing seeks to end the dominance of a few heavyweights and achieve a more equitable distribution of wealth.
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