China giveth and China taketh. Yes, the valuation of Ant Financial, which until recently was one of the world’s largest financial institutions, has been cut. Through an asymmetric attack from the Chinese government on Ant Financial after an own-goal comment by its founder, Jack Ma of Alibaba empire, the company has been decimated.
A company that was valued more than Goldman Sachs has been taken out of the main league after the government dismantled its money-making operations. That dismantling was ferocious and unparalleled with license withdrawn and operations redesigned by fiat rules.
The company whose IPO was put at $300 billion in 2020 is now valued as low as $70 billion! Unfortunately for the American companies which heralded that aborted IPO are not even sure this floor is the lowest. In other words, this company can end up $0 as China continues to work on its magic.
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Fintech giant Ant Group Co.’s valuation was trimmed again by global investors who bought private shares ahead of its suspended initial public offering.
Boston-based Fidelity Investments cut its estimate for Ant to $70 billion at the end of May, according to Bloomberg calculations based on filings. That’s down from $78 billion in June last year, and $235 billion just before Ant’s IPO was torpedoed by regulators in November 2020.
We all admire China but things like this make you feel better that you live in Nigeria where, at least, we have the “freedom” to own assets even though we may not be where we can be as a nation. China can wake up and suspend the license of edtech companies worth billions of dollars, and mandate them to become charities, after investors have put hundreds of millions of dollars in these firms. I do not admire such high voltage searchlights on personal properties as they can burn visions and energies.
There is nothing ant-like in these numbers. Yes, Alibaba’s affiliate fintech company, Ant Group (of Alipay), does generate more payment volume than Visa & Mastercard combined! Ant does $18 trillion while the American giants bring in $16 trillion. Ant operates primarily in China while Visa and Mastercard run around the world!
China, why must you spray insecticides on a $300 billion ant?
Comment on LinkedIn Feedback
Comment 1: #china has an alternate view on economics n wealth. We will falter if we try to apply western n capitalistic frameworks to assess China mkt opportunities and China state policies.
A simple point seems to be that China doesn’t see big value in serious concentration of wealth in private pools.
Response 1: “A simple point seems to be that China doesn’t see big value in serious concentration of wealth in private pools.” – that is the revelation indeed. But how do you help people if companies cannot become big and provide jobs, opportunities, etc? When companies become big, the owners are typically rewarded! I cannot see another way China will cut that off.
Comment 2:Jack Ma is nowhere to be seen. Jack Ma is not complaining.
Is the Chinese government spraying insecticides or the people breeding the insect that is harvesting it?
I am not insinuating anything. Just saying, this world where there is no technology for us to publicly listen to the conversation of these world leaders and CEOs is something else.
Respond 2: “Jack Ma is nowhere to be seen. Jack Ma is not complaining.” – how do you know that he is not complaining? When your university is renamed and taken from you. Your company cut into pieces, pushed you out of the Board, dismantled your operating licenses on your cash cow, etc, what do you mean by ” Jack Ma is not complaining”?
Alibaba’s Ant Group (Alipay) – There Is Nothing Ant-like In These Numbers
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That is why I cannot watch my beloved Nigeria collapse, it doesn’t matter what others think, because stakes are not the same for all Nigerians, some are throwing in everything to see a working Nigeria.
No country elsewhere will give me the freedom to do all the things I would like to do here, so it’s a case of ensuring that the conditions are decent enough to keep powering forward; there is no viable alternative.
China’s model doesn’t suit us, and US model will create more dislocations, so what can work for us? We haven’t been lucky enough to have economists and political scientists with the required brainpower to create original economic model specially for Nigeria and Nigerians.
We need large companies and small businesses, how do we create the necessary balance without suffocating either? And how do we ensure that large companies and growth equal job opportunities for our growing population?
Perhaps we can become the first country where revenues and profits will automatically mirror employment. How? For every financial milestone, there must be minimum number of employees on the payroll. What it means is that as revenues and profits grow, jobless people will be celebrating, because you must hire!
I have an evolving idea…