Thursday, November 5, 2020

Jack Ma's Free Speech Hurt Ant Financial IPO, Carlyle Impacted

 Reuters reported:

Corporate China's shiniest star was just days away from seeing his Ant Group list on the stock market in a record $37 billion deal, when he chose to launch a blistering public attack on the country's financial watchdogs and banks.

The regulatory system was stifling innovation and must be reformed to fuel growth, billionaire Ma told a summit in Shanghai on Oct. 24 attended by the great and the good of China's financial, regulatory and political establishment.

Stung by the attack, Chinese regulators and Communist Party officials set about reining in Ma's sprawling financial empire, culminating in the suspension of the IPO on Tuesday, two days before the eagerly awaited market debut in Shanghai and Hong Kong, the sources said.

The Carlyle Group invested in Ant Financial in May 2018 joining other investors in a $10 billion round which valued Ant at $150 billion. TechCrunch reported:

Ant would have sported a possible market valuation of more than $300 billion at its IPO price. Such a valuation would rank it amongst the most valuable companies in the world.

Carlyle's double is delayed at least six months according to FT.

The Carlyle Group's co-founder David Rubenstein built his vast fortune catering to the world's political elite, even employing some of them.  Will Rubenstein try to smooth over Ant Financial's turbulent waters?  Might he coach Jack Ma in the art of apology, given his history with Carlyle Capital Corporation and an angry Kuwait SWF?  

It will be interesting to see how much Ma's honesty costs Carlyle in the end.  

Update 11-12-20:  Chinese President Xi pulled Ant's IPO according to the WSJ.  That will take some serious apology horsepower.  

Update 1-21-20:  Carlyle's big payday from Ant is in jeopardy.

Update 2-9-21:   There is no timeline for Carlyle to cash in on its Ant investment.

Update 3-18-21:  Investor valued Ant Holdings at over $200 billion, down from $315 billion in the run up to the planned IPO.

Update 9-3-21:  Carlyle co-founder David Rubenstein spoke to the situation Ant Financial faces with the Chinese government in a Bloomberg interview.  He said the problem arose from entrepreneurs, like Jack Ma, becoming larger than government officials in the public sphere.

Update 9-13-21:  "Any wealthy person with an ounce of sense is keeping silent and bowing their heads, to avoid political fire, and in subservience to the Chinese Communist Party."  

Update 10-25-21:  Alibaba lost a whopping $344 billion in market capitalization.  The biggest wipe-out of shareholder value globally came after Beijing suspended the listing of its fintech arm Ant Group.