Alibaba Shares Bleed As Jack Ma Braces To Cede Control Over Ant: Report

Alibaba Group Holding Limited BABA co-founder Jack Ma plans to surrender control of Ant Group Co to sharpen its initial public offering prospects, the Wall Street Journal reports.

China quashed Ant's $34 billion-plus IPO in 2020 at the eleventh hour, forcing the technology firm to restructure as a financial holding company regulated by China's central bank. 

As the overhaul progressed, Ant aimed to reduce the company's reliance on Ma, whose outspokenness had cost the IPO in 2020. Ma personally contemplated surrendering control of Ant for years to beat corporate-governance risks arising thereof.

Ma currently controlled 50.52% of Ant's shares via an entity in which he held a commanding position. Ma could relinquish his control by transferring some of his voting power to other Ant officials, including CEO Eric Jing, after which they would collectively control the company.

Ant informed regulators of Ma's intention to cede control as the company prepared to convert into a financial holding company. Ma quit the CEO job at Alibaba in 2013, exited as Chair in 2019, and held less than 5% of Alibaba's shares.

China has targeted the 57-year-old former English teacher and one of China's most prominent entrepreneurs to reduce his influence and the power of his companies, the WSJ writes. 

Ma controlled Ant since he carved its precursor assets out of Alibaba more than a decade ago. Over time he built it into a company that owned the Alipay payments network with over one billion users, an investing platform that houses what was once the world's largest money-market fund, and a large microlending business. 

Ant was likely to be valued at over $300 billion had it gone public. Recently Bernstein predicted high chances of the Ant IPO amid easing regulations.

Price Action: BABA shares traded lower by 4.85% at $97.80 on the last check Thursday.

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