Ant Financial IPO Rumored to Hit Hong Kong Exchange
Ant Financial IPO rumors surfaced back in 2018. Two years later and the rumors are back. Investors have been waiting for this Alibaba affiliate to launch shares on the public markets. But can investors expect Ant Financial stock?
Here’s what we know…
Ant Financial IPO: The Business
Jack Ma, co-founder of Alibaba Group (NYSE: BABA), founded Alipay in 2004. It was an online payment platform. In 2013, Alipay overtook PayPal as the world’s largest mobile payment platform. And the next year, in 2014, Alipay rebranded as Ant Financial Services.
Now Ant Financial offers a suite of financial services. They include mobile payments, savings accounts, personal investing, credit scoring and lending. Ant also became the most valuable investment unicorn. The company was valued at $150 billion in 2018 after a fundraising round of $14 billion in investor capital.
But analysts believe that value could go well past $200 billion after an Ant Financial IPO. And it isn’t the first time the company has looked at launching Ant Financial stock.
Ant Financial Revisits IPO Amid Growth
Ant Financial had plans to go public back in 2018. But its stock never hit the market. The company shelved the IPO due to regulatory and profitability issues. Since Ant Financial is a private company and hasn’t publicly filed, financial information is hard to find. However, we can look at what the company is doing now to see why investors might be able to expect an Ant Financial IPO.
The company benefited from a rise in mobile payments and money market funds for consumers. This trend was heavy in China, Ant Financial’s main consumer base. And with Alipay being the top mobile payment platform in the world, it makes sense that the company reflected that growth.
In addition to the growth of mobile, the company is growing in other ways. Douglas Feagin, president of the international business group at Ant Financial, said Ant Financial is expanding. It’s providing financial services to small businesses. The company also lends to consumers.
Feagin said the average loan given by Ant Financial is about $1,600. And small businesses are able to use the Alipay platform to accept payments while creating a track record for lending with Ant Financial.
The company also plans to increase its number of users to 2 billion by 2029. In November 2019, the company had more than 1.2 billion users worldwide. Feagin said:
It’s 900 million in China, 300 million outside. We see the 300 million growing dramatically outside of China. Indeed, we have an ambition of serving 2 billion consumers over the next 10 plus years and so clearly the majority of those are going to come from outside China.
He recognized Asia as a growing potential market and a focal point for Alibaba as a whole. In November 2019, Alibaba raised $12.9 billion in a secondary Hong Kong listing. The company’s stock also reacted positively on the market after reported news of an Ant Financial IPO.
But investors have long waited to get their hands on the company’s shares. So will there ever be Ant Financial stock?
When Will Ant Financial IPO?
Ant Financial filed for a dual listing. The company was approved for both the Hong Kong Stock Exchange and Shanghai’s Star Market. About a week later, Ant priced its shares at $10.32 and $10.26, respectively. This meant the Ant Financial IPO would be the biggest to date, set to raise $34.4 billion. Previously, the record was $29.4 billion by Aramco.
The Ant IPO date was set for November 5, 2020. But on November 3, Ant made an announcement:
“Ant Group Co., Ltd. (the “Company”) announces that it was notified by the relevant regulators in the PRC today that its proposed A Share listing on the STAR Market is suspended as the Company may not meet listing qualifications or disclosure requirements due to material matters relating to the regulatory interview of our ultimate controller, our executive chairman and our chief executive officer by the relevant regulators and the recent changes in the Fintech regulatory environment. Consequently, the concurrent proposed H Share listing on the Main Board of The Stock Exchange of Hong Kong Limited shall also be suspended.”
Part of the reason is new exchange regulations. The other part is Ant’s filings. But some think Alibaba co-founder Jack Ma is to blame. About a week before Ant was summoned by the exchange, Ma criticized Chinese regulators for being too risk averse. And the suspension could be their response.
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Investors are unsure when there will be Ant Financial stock. But for now, it looks like the company might move the Ant Financial IPO date to 2021.
About Amber Deter
Amber Deter has researched and written about initial public offerings (IPOs) over the last few years. After starting her college career studying accounting and business, Amber decided to focus on her love of writing. Now she’s able to bring that experience to Investment U readers by providing in-depth research on IPO and investing opportunities.