By
Darya Rudz
November 1st, 2023
The impact of these suspensions has taken its toll on Alibaba and the company’s shares beyond Asia and the company’s stock lost about 8% on Tuesday on NYSE.
The shares of Alibaba Group Holding Ltd (HKG: 9988) plunged by about 7.54% on Wednesday in Asia trade. The plunge became imminent following the suspension of the public listing of Ant Group on the floors of the Shanghai Stock Exchange as well as the Hong Kong Stock Exchange.
According to an earlier report by Coinspeaker, the suspension of the Ant Group’s IPO in which Alibaba’s has a stake as it controls about 33% stake in the former company, came after authorities summoned Jack Ma, the founder of Alibaba and the Controller of Ant Group, Ant Group’s Chief Executive Officer Simon Xiaoming Hu and executive chairman Eric Jing by Chinese Authorities.
The suspended IPO which is projected to be the world’s biggest with about US$34.5 billion on track to be raised borders on regulatory concerns, a factor which the Shanghai Stock Exchange drew on to reveal that Ant Group has reported “significant issues such as the changes in financial technology regulatory environment,” according to a CNBC translation of the statement from Mandarin. “These issues may result in your company not meeting the conditions for listing or meeting the information disclosure requirements.”
Following the pronouncement from the Shanghai Stock Exchange, the company noted that the scheduled listing on the Hong Kong Stock Exchange will also be halted. The impact of these suspensions has taken its toll on Alibaba and the company’s shares beyond Asia and the company also sheds about 8.10% on Tuesday on NYSE.
Alibaba Promises Support Despite Its Flailing Shares Position
Ant Group has acknowledged and apologized for the inconvenience caused as a result of the IPO suspension. In restoring potential investors’ confidence, Ant noted in its released statement that it will diligently follow up and work with authorities in working to comply with the necessary regulations that will eventually allow the IPO scale through in the near term.
As a firm with a vested interest, Alibaba has pledged its support to Ant Group, reaffirming the confidence it has in the company’s workforce.
“We will be proactive in supporting Ant Group to adapt to and embrace the evolving regulatory framework,” Alibaba’s spokesperson said. “We have full confidence in Ant Group colleagues’ ability to do a good job. Society has high expectations for Alibaba. We will continue to work hard to not only meet but exceed expectations and fulfill our responsibility to society.”
According to a CNBC report, the continuous growth in Fintech particularly those offering banking services, one of the many products which Ant Group has spread its tentacles in is continuously attracting serious scrutiny from the Chinese authorities such as the China Securities Regulatory Commission which summoned Ma and the other Ant Group’s executives. With a slight foray into Antitrust activities as the U.S. was doing with the top tech firms in the country, the regulatory overview is likely geared to ensure a healthy and balanced economy for all.