Ant Group announced a surprise share buyback that values the fintech giant at $78.54 billion, well below the $315 billion touted in an abandoned IPO in 2020, in a move that may let some investors exit after a lengthy regulatory overhaul of the firm.
“The repurchased shares will be transferred into Ant Group’s employee incentive plans to attract talents. The repurchase proposal will also provide a liquidity option for the company’s investors,” it said.
“While Ant buys back shares at a valuation much lower than the $150 billion figure in the company’s last fundraising round in 2018, the plan provides some liquidity to its existing investors,” said Zhang Zihua, chief investment officer at Beijing Yunyi Asset Management which is an investor of Ant’s affiliate, e-commerce titan Alibaba.He said neither did he nor the markets expect the share buyback at this stage.
“Any progress here not only benefits Alibaba, but is also good for the internet and fintech industries as a whole.” For the broader technology sector, Ant’s fine marks a key step towards the conclusion of China’s bruising crackdown on private enterprises, which began with the scrapping of Ant’s IPO in late 2020 and subsequently wiped billions off the market value of several companies.
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