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Ant Group’s valuation halved

An estimate from US asset management firm Fidelity Investments halves the valuation of the financial arm of Alibaba, Ant Group, the owner of the Alipay payments app.

The tumble of a finance titan

While in November 2020, Alibaba’s financial subsidiary nearly signed the largest IPO in history with a valuation of $ 315 billion, the suspension of the transaction by the Chinese government was a game-changer. . Since then, the valuation of Ant Group has plummeted. In March 2021, fintech investors estimated Ant Group at 200 billion. This time, according to the Wall Street Journal, Fidelity Investments, which owns shares in the conglomerate, is all the more severe and values ​​the group at $ 144 billion.

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This decrease is explained by the reshaping of Ant Group activities, the organizational restructuring of the company, an antitrust investigation which was accompanied by a record fine, or the passing disappearance of its founder Jack Ma. can be explained in part by Beijing’s desire to access the large amount of Ant Group data. For good reason, more than a billion users use Alipay. Between June 2019 and 2020, the application processed over $ 17 trillion in transactions. In addition, Ant Group offers several products such as insurance contracts, mutual funds and loans that have damaged the banking system. A range of financial activities which tends towards a reduction over the imposed restructuring.

In the long term, Ant Group remains interesting for investors

It is therefore these elements that have prompted Fidelity Investments to revise downward the valuation of the financial branch of Alibaba. This loss of value is not necessarily inevitable, neither for the American company nor for that of Jack Ma. stock market activities being marked by fluctuations, Ant Group could as well be revalued … or devalued. “ The valuation of shares of unlisted companies is subject to a great deal of judgment “, Notes Murray Grenville, CEO of the Sterling Valuation Group holding company, who believes that” if the goal posts have changed … this must be taken into account in the evaluation “.

A new IPO project would go in the direction of a revaluation, but given the context facing Ant Group in China this would likely happen within several years. However, this does not frighten all investors: “ They are aware of the risk of investing in Ant, but long-term investors focus on the prospects for the company for years to come. », Explains a spokesperson for Fidelity Investments.

For the asset management company, this drop in Ant Group’s valuation should not have a major impact. Fidelity’s investments in pre-IPO companies represent only a tiny fraction of the asset management firm’s funds. 3 years ago, Fidelity had invested 238 million. A tip for the company which in 2018 had 2,600 billion in assets under management according to The echoes.

An estimate from US asset administration agency Constancy Investments halves the valuation of the monetary arm of Alibaba, Ant Group, the proprietor of the Alipay funds app.

The tumble of a finance titan

Whereas in November 2020, Alibaba’s monetary subsidiary almost signed the most important IPO in historical past with a valuation of $ 315 billion, the suspension of the transaction by the Chinese language authorities was a game-changer. . Since then, the valuation of Ant Group has plummeted. In March 2021, fintech buyers estimated Ant Group at 200 billion. This time, in keeping with the Wall Road Journal, Constancy Investments, which owns shares within the conglomerate, is all of the extra extreme and values ​​the group at $ 144 billion.

In the identical class

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This lower is defined by the reshaping of Ant Group actions, the organizational restructuring of the corporate, an antitrust investigation which was accompanied by a report wonderful, or the passing disappearance of its founder Jack Ma. could be defined partly by Beijing’s need to entry the big quantity of Ant Group knowledge. For good cause, greater than a billion customers use Alipay. Between June 2019 and 2020, the appliance processed over $ 17 trillion in transactions. As well as, Ant Group affords a number of merchandise corresponding to insurance coverage contracts, mutual funds and loans which have broken the banking system. A variety of monetary actions which tends in the direction of a discount over the imposed restructuring.

In the long run, Ant Group stays attention-grabbing for buyers

It’s due to this fact these components which have prompted Constancy Investments to revise downward the valuation of the monetary department of Alibaba. This lack of worth isn’t essentially inevitable, neither for the American firm nor for that of Jack Ma. inventory market actions being marked by fluctuations, Ant Group may as nicely be revalued … or devalued. “ The valuation of shares of unlisted corporations is topic to a substantial amount of judgment “, Notes Murray Grenville, CEO of the Sterling Valuation Group holding firm, who believes that” if the aim posts have modified … this should be taken into consideration within the analysis “.

A brand new IPO challenge would go within the route of a revaluation, however given the context dealing with Ant Group in China this could probably occur inside a number of years. Nevertheless, this doesn’t frighten all buyers: “ They’re conscious of the chance of investing in Ant, however long-term buyers give attention to the prospects for the corporate for years to return. », Explains a spokesperson for Constancy Investments.

For the asset administration firm, this drop in Ant Group’s valuation shouldn’t have a significant influence. Constancy’s investments in pre-IPO corporations signify solely a tiny fraction of the asset administration agency’s funds. 3 years in the past, Constancy had invested 238 million. A tip for the corporate which in 2018 had 2,600 billion in property underneath administration in keeping with The echoes.

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