China's Ant Group has announced a surprise share buyback that values the fintech giant at $78.5 billion, well below the $315 billion touted in an abandoned IPO in 2020, in a move that may let some investors exit.The announcement came after China's financial regulator on Friday fined the Alibaba Group affi
China's Ant Group has announced a surprise share buyback that values the fintech giant at $78.5 billion, well below the $315 billion touted in an abandoned IPO in 2020, in a move that may let some investors exit.
The announcement came after China's financial regulator on Friday fined the Alibaba Group affiliate $984 million for violating laws and regulations, a move seen by many industry observers as a sign that a regulatory crackdown on the country's technology sector is over.GARY NG, ASIA PACIFIC SENIOR ECONOMIST AT NATIXIS IN HONG KONG:
"The major pressure that a lot of these companies have been facing is really this bad sentiment. There are a few things that have changed from last Friday. The first is that some companies have been fined a significant amount but I think that offers, like a certain comfort to the market that possibly this regulatory tightening is actually getting to the end or basically cannot be worse than before.
"And second, of course, we're talking about the share buyback plan. I think that also helps boosting the sentiment of the share price.""Ant Group has announced a repurchase plan, which reflects a significant decrease in the company's valuation compared to its previous preparation for IPO. However, this news did not cause a drop in Alibaba's stock price, but instead showed a clear upward trend.
"Looking back over the past few years, Alibaba's stock price has experienced a significant decline, mainly due to concerns in the market about the negative impact of industry regulation on the company. If investors can eliminate their concerns about this aspect of Alibaba, it will help the company's stock price rebound in the future.""Their share prices have strongly rebound today mainly driven by the expectation that regulatory pressure from mainland government will ease.
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