After a three-year investigation, Ant has been fined nearly $1 billion. The conflict stemmed from Ma's critique of Beijing's financial regulation, leading to the cancellation of Ant's record-breaking IPO. The crackdown has undermined confidence in China's private sector and resulted in a significant decline in Ant's valuation. Ant has undergone significant business model changes, scaling back in sensitive sectors and reducing competition with state-backed banks.
Ant has proposed buying back up to 7.6% of shares, providing investors affected by regulatory actions with an opportunity to reduce stakes. Alibaba is considering offering some of its Ant shares for the buyback. Despite an 8% rally in shares on Friday, Alibaba's market value is currently $234 billion, down about $620 billion from its 2020 peak.
Why it matters
The loss of over $850 billion in Ma's property value highlights the challenge of rebuilding trust with international investors. China's economic struggles and shifting national priorities further compound the task. If a downside scenario unfolds, with a property slump, slow reforms, and US-China decoupling, China's economic growth could decelerate to 3% by 2030 (Bloomberg Economics).