Tencent Caught In Regulatory Turmoil Like Jack Ma's Ant Group

  • China looks to require Tencent Holdings Ltd TCEHY to include WeChat Pay in a newly created financial holding company, Bloomberg reports.
  • The overhaul may mandate a new license for the universal mobile payments service subjecting it to intense regulatory scrutiny jeopardizing the one-stop-shop appeal reviving investor angst.
  • Tencent needs to fold its banking, securities, insurance, and credit-scoring services into a financial holding company subject to regulations like Alibaba Group Holding Ltd BABA founder Jack Ma's Ant Group Co.
  • Also Read: Alibaba's Market Cap Has More Than Halved Since Ant IPO DebacleAfter Alibaba, Tencent Could Attract Regulatory Penalty
  • Ant's estimated valuation plunged to $63 billion from over $300 billion partly due to the stricter regulations of being a financial holding company.
  • Regulators weighed whether WeChat Pay could be included in that holding company and operate separately from the leading social media arm. 
  • China previously ordered Tencent and other internet firms to disassociate financial services from its primary business.
  • Price Action: BABA shares closed lower by 4.33% at $100.43 on Thursday.
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