IN August 2020, Ant Group Co. Ltd. filed the documents for Initial Public Offering with a plan to raise $30 billion. The firm revealed that it made a net profit of $2.6 billion in 2019. In October, the IPO was priced to raise $34.5 billion, and value Ant Group at over $313 billion in the dual Shanghai and Hong Kong listing.
That would have made Ant the 13th largest company in the world by stock market value assuming the price did not increase on listing day, which was almost positively going to happen. Even a 10-percent increase in price would have made Ant more valuable than Walmart, which is fantastic since Ant was founded only six years ago.
But then, just two days before Ant’s billion-dollar IPO on November 3, 2020, Chinese regulators extraordinarily suspended the process.
Apparently, no one gave much thought to the fact that Ant founder Jack Ma sort of disappeared from public view after he gave a speech on October 24, 2020 at 11 a.m. during the Bund Summit in Shanghai. Perhaps he was just busy getting ready for the IPO.
Then again in the speech, Ma said some “annoying” things. He was critical of Chinese government regulators for stifling innovation and said Middle Kingdom banks have a “pawnshop mentality.” Not satisfied, he went on to say that the regulatory environment was similar to trying to “use the way to manage a railway station to manage an airport.”
Maybe the Chinese government deserved that rebuke, at least from Jack Ma’s point of view. On September 16, 2020, a little over a month before the speech, the China Banking and Insurance Regulatory Commission issued new guidelines stating that funding from banks and shareholders should not exceed a microfinance company’s total net assets. This was potentially a huge blow to Ma’s company.
But then again in 2015, Ant Group raised $4.5 billion in funding with investors including China Investment Corp., CCB Trust, China Life, China Post Group, China Development Bank Capital and Primavera Capital Group. China Investment Corp. and China Post are state-owned and in truth, if a company has “China” in its name, the government has a finger in the pie.
File all this under “don’t bite the hand that feeds you.” Being on the World’s Richest list does bring perks and benefits. But in China, the first item on your resume must be “Member in Good Standing of The Communist Party Of China.” “Good Standing” are the operative words.
Wang Xing is a Chinese billionaire businessman and the CEO of Meituan-Dianping. Forbes estimates his net worth at $28.8 billion as of January 2021. Meituan is GrabFood, Lazada, and TripAdvisor rolled together 10,000 times over with 50,000 employees and 350 million people using its apps.
On April 26, China’s State Administration for Market Regulation (SAMR) opened an investigation into “suspected monopolistic practices” of Meituan. It is only the second antitrust investigation into a domestic technology firm, Jack Ma’s Alibaba being the first.
On May 6, Wang Xing posted a poem online through the Twitter-like service that he founded, Fanfou. The 28-character poem was from a 1,100-year-old text. It tells a story of an ancient emperor, Qin Shi Huang, who burned books to silence intellectuals. But two uneducated people eventually overthrew him.
The poem was deleted on Sunday, May 9. On Monday, shares of Meituan closed down 7 percent, wiping out around $16 billion from the firm’s market cap. Wang Xing has not disappeared yet.
1 comment
In China, everything is owned by the Party. Jack Ma is one of it’s official member with a senior rank. China is one big syndicate if not the biggest in history.