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It seems that the Communist Chinese government under Xi JinPing is not happy that a financial institution like Ant has an IPO valuation higher than was expected. As a result, the government is moving to clamp down on Ant and reduce the IPO per share price.<\/p>\n
https:\/\/www.business-standard.com\/article\/international\/china-s-move-to-halt-ant-ipo-could-slash-fintech-giant-s-value-by-140-bn-120111000029_1.html<\/a><\/p>\n From the article:\u00a0 New regulations that could force Ant to raise more capital to back lending and seek national licenses to operate across the country may reduce the firm\u2019s valuation by about half, according to estimates from Morningstar Inc. and other firms. The regulatory details are preliminary and could be subject to change.<\/p>\n If Ant\u2019s $280 billion pre-IPO valuation is halved, it would essentially mean the company is worth less than what it was two years ago when it raised money from some of the world\u2019s largest funds including Warburg Pincus , Silver Lake Management LLC and Temasek Holdings.<\/p>\n The reduced valuation also means potentially lower fees for investment banks like\u00a0China\u00a0<\/a>International\u00a0<\/a>Capital Corp that were counting on a windfall from Ant\u2019s record-setting IPO.\u00a0\u2013 article<\/p>\n Ah! The Communist Chinese government does not like it when the in-house companies under its watch get too big for Xi Jinping\u2019s britches.<\/p>\n The issue here is the profit available from the IPO stock when sold. Instead of going into a high-end valuation, the stock price is predicted now to decline by up to 50% of its prior value, which leaves Ant with less leverage than it had.<\/p>\n But that is not all: Jack Ma, head of Ant, was summoned to explain himself to the Chinese government because he criticized the country\u2019s state-owned banks.<\/p>\n