The share repurchase program for Jack Ma-owned Ant Group lowers valuation by 70%

The share repurchase program for Jack Ma-owned Ant Group lowers valuation by 70%

The billionaire Jack Ma-founded fintech giant Ant Group announced a share repurchase plan on Saturday, valuing the business at $78.54 billion rather than the $300 billion or more expected in mid-2020. 

A brief about the share repurchase program for Jack Ma-owned Ant Group lowers valuation by 70%

After a regulatory overhaul of the company, the corporation stated that the management wants to replenish its worker incentive pool and allow certain investors go, according to Reuters. 

Ant said that it has offered to repurchase up to 7.6% of its stock interest from all of its shareholders for a price that corresponds to a group valuation of about $78.54 billion, or roughly 567.1 billion yuan. 

“To recruit talent, the repurchased shares will be added to Ant Group’s employee incentive programmes. The repurchase plan will also give the company’s investors a liquidity choice, it added. 

The business also stated that Hangzhou Junhan Equity Investment Partnership and Hangzhou Junao Equity Investment Partnership, two of Ant’s largest shareholders, have freely chosen not to take part in the repurchase. 

The Ant Group, which was founded by billionaire Jack Ma, runs companies that include consumer loans, insurance product distribution, and China’s most popular mobile payment app, Alipay. 

In order to be subject to regulations and capital requirements more like to those for banks, Ant decided in April 2021 to restructure its business model by converting itself into a financial holding company. 

The top financial authorities in China fined Ant Group $994 million on Friday for violating laws pertaining to corporate governance and consumer protection. 

The People’s Bank of China, the National Financial Regulatory Administration, and the China Securities Regulatory Commission jointly announced that Ant Group had also infringed the law in regards to payments, funds sales, anti-money laundering, banking and insurance company activities, and payments. 

 Ant Group said in a statement, “We will comply with the terms of the penalty in all earnestness and sincerity and continue to further develop our compliance governance. 

Following a speech by Ma in which he lambasted China’s banks and financial regulators, Ant Group was forced to abruptly cancel its $37 billion IPO in November 2020.  

Alibaba received a record-breaking fine from China’s antitrust authorities the following year. Alibaba was penalized 18.2 billion yuan ($2.5 billion) in April 2021 for acting monopolistically. 

Alibaba revealed intentions to divide its operations into six distinct companies in March of this year. According to the corporation, each new business unit would be managed by a separate chief executive and board of directors. According to the corporation, five of the new business divisions will have the freedom to obtain outside funding and perhaps even consider an IPO. 

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