• Market Crumbs

Ant Group Suspends IPO

Image via Ant Group

It was just last week when Ant Group stole headlines after it was revealed retail investors placed orders for $3 trillion worth of shares for its IPO. The dual listing IPO was slated to be the largest ever, raising about $34.4 billion and easily surpassing Saudi Aramco’s $29.4 billion listing last December.

Ant Group had a "miracle" take place to get the valuation, according to Jack Ma, who is the founder of Alibaba, which owns a 33% stake in Ant Group.

"It's the first time that the pricing of such a big listing — the largest in human history — has been determined outside New York City” Ma said last month. "We didn't dare to think about it five years ago, or even three years ago. But a miracle just occurred."

Other comments Ma made last month such as calling the Basel Accords an "old people's club" and saying Chinese banks are like “pawn shops" have caught the attention of Chinese authorities. Ma and Ant Group executives were summoned by Chinese regulators including the central bank and banking watchdog for a joint supervisory interview on Monday.

Yesterday, the miracle IPO hit a brick wall when the Shanghai and Hong Kong stock exchanges suspended the listing. The Shanghai Stock Exchange cited the previous day's meeting Ma and Ant Group executives had with the China Securities Regulatory Commission as to why the listing was suspended.

The exchange said Ant reported "significant issues such as the changes in financial technology regulatory environment," according to a translation by CNBC. "These issues may result in your company not meeting the conditions for listing or meeting the information disclosure requirements."

Ant Group said it pulled the Hong Kong listing after it was told by the Shanghai Stock Exchange that their IPO would be delayed.

"We will properly handle the follow-up matters in accordance with applicable regulations of the two stock exchanges," Ant Group said in a statement. "We will overcome the challenges and live up to the trust on the principles of: stable innovation; embrace of regulation; service to the real economy; and win-win cooperation."

The news caused shares of Alibaba to drop more than 8% as the company said it will "be proactive in supporting Ant Group to adapt to and embrace the evolving regulatory framework."

All eyes will now be on Jack Ma to see if he can undo the damage and get the record-setting IPO back on track.

Leftover Crumbs

  • Don't count on a cruise this year. Cruise Lines International Association, which represents 95% of U.S. cruise lines, will extend its voluntary suspension through December so cruise lines can prepare to meet health standards. "As we continue to plan for a gradual and highly-controlled return of cruise operations in the U.S., CLIA members are committed to implementing stringent measures to address COVID-19 safety, including 100% testing of passengers and crew, expanded onboard medical capabilities, and trial sailings, among many others," the CLIA said.

  • Jack is safe at Twitter. A committee formed by Elliott Management to review Twitter's management has recommended the current management structure remain in place. The committee also suggests Twitter changes its board structure to give shareholders a larger vote and said it will continue to monitor management's performance. Earlier this year Twitter and Elliott agreed to a deal in which Twitter committed to $2 billion in share repurchases and appointed two board members.

  • Russia's Ozon files for IPO. Russian online retailer Ozon has filed with the U.S. Securities and Exchange Commission for an IPO. Sources say Ozon, which has benefitted from the rise of e-commerce as a result of the coronavirus, may seek to raise up to $500 million. "We intend to retain all available liquidity sources and future earnings, if any, to fund the development and expansion of our business," Ozon said. "Despite reporting losses since 2018, we have demonstrated improving profitability."

  • Don't hold your breath for an electric Ferrari. Ferrari CEO Louis Camilleri said he doesn't expect to see even 50% of the Ferrari lineup go electric "within my lifetime." Ferrari reported a strong quarter and provided a solid outlook as the company says orders are back to pre-pandemic levels. "There should be cost savings with EVs longer-term, but they won't be extravagant,” Camilleri said. “We will get larger improvements from focusing on other parts of our business, including Formula 1."

  • Election bets top $1 billion. Bets on the U.S. Presidential election have surpassed $1 billion according to estimates by British sports betting and gambling firm GVC. The total is the most ever for a political event and double the amount bet during the 2016 election. "This is a huge market. It is twice as big as 2016, easily making it the biggest political event ever," GVC head Matthew Shaddick told AFP. "It might be the biggest ever market on anything pretty much and outstrip football worldwide. I guess a billion pounds ($1.3 billion) is being bet."