Ant Group's IPO Was Suspended

Ant Group's IPO Was Suspended

over 3 years ago2 mins

The Chinese and Hong Kong stock exchanges announced on Tuesday they’ve suspended Ant Group’s much-anticipated initial public offering (IPO) 🐜

What does this mean?

Ant Group – China’s leading mobile payments firm – had already raised $37 billion from institutional investors, and it was all set to list its shares on both stock exchanges on Thursday in what would’ve been the world’s biggest-ever IPO.

That is, until Chinese regulators asked to meet Ant Group bosses 🏢 See, while the company had already flagged that the IPO would have to navigate certain regulatory risks, this summons might’ve been one risk too far: both stock exchanges hit the pause button, pointing to (unspecified) regulatory changes.

Why should I care?

This will sting: there’s been so much demand for Ant Group’s shares among institutional investors that the company stopped taking orders sooner than expected. That demand was partly because Chinese investment managers see the shares as a must-have, but also because its stock will likely get another boost when it joins the major stock indexes 📈 The investment funds that track those indexes will, after all, immediately buy in too – and that’s to say nothing of all the retail investors who want its shares. Little wonder, then, why some investors thought Ant Group’s share price might’ve doubled when it “went public”.

It’s worth keeping in mind that a stock’s rise on the first day it’s traded – which is an average of 18% in the US – mostly benefits the major investors who bought in before the stock became publicly available 🤔 That said, it’s not particularly easy to buy new shares before they start trading publicly – and even if you get in on day one, 60% of IPOs end up trading below their initial price five years down the line anyway.

Finimize

BECOME A SMARTER INVESTOR

All the daily investing news and insights you need in one subscription.

Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.

/3 Your free quarterly content is about to expire. Uncover the biggest trends and opportunities. Subscribe now for 50%. Cancel anytime.

Finimize
© Finimize Ltd. 2023. 10328011. 280 Bishopsgate, London, EC2M 4AG