Alibaba’s financial success has not allayed investor fears about the company’s future

What Is Ant, the Chinese Fintech Giant With Big IPO Plans? | WSJ

Alibaba’s financial success has not allayed investor fears about the company’s future

Alibaba is likely to emerge from the crisis amid the upcoming release of its financial report for the last quarter. However, the outlook for China’s most famous tech giant still worries investors due to regulatory crackdown..

The company is expected to report a 33% jump in revenue in the fourth quarter of last year.

Alibaba’s e-commerce services have become especially in demand during the coronavirus pandemic, when people went online in droves. And the very last quarter of the year included a big trade event «bachelor day», which brought tens of billions to entrepreneurs dollars.

Alibaba's financial success has not allayed investor fears about the company's future

But strong earnings may not be enough to allay fears of investors who are alarmed at how hard the Chinese government has tackled the tech empire. Jack Ma.

Ma, who co-founded Alibaba more than two decades ago, has watched his business ire the government in recent months. Recently he was also insulted by the state media. In the list of outstanding businessmen, the Shanghai Securities Journal did not mention Ma, while noting his competitors in the segment.

Alibaba has a market capitalization of over $ 700 billion, making it one of the most ranked tech companies in the world..

Beijing is increasingly worried about the impact of large private technology companies in the financial industry and other areas, as well as how ingrained they are in the country’s daily life through digital payment applications and other services..

Alibaba shares fell last November, although the company’s earnings topped estimates as it reported the results just after regulators postponed the long-awaited IPO its financial partner Ant Group.

Since then, the situation has worsened for Alibaba and other Chinese tech companies.. PRC President Xi Jinping in December named efforts to strengthen antitrust rules on online platforms as one of the most important goals for 2021, and regulators have announced an antitrust investigation against Alibaba.

Alibaba's financial success has not allayed investor fears about the company's future

Ant Group, meanwhile, was forced to reconsider your business model after being criticized by authorities for driving out competitors from the market, harming consumer rights and exploiting regulatory loopholes for their own profit.

And Gan, Governor of the People’s Bank of China, said last week that the regulator’s interactions with the company continue.

Alibaba and Ant’s troubles have had a big impact on their asset prices. New York-listed Alibaba shares fell about 17% from a peak in late October, reducing the company’s market capitalization by more than $ 140 billion..

Some analysts still believe that Alibaba can survive the pressure of the Chinese authorities relatively painlessly.. Martin Chorzempa, a senior fellow at the Peterson Institute for International Economics, said the Chinese government probably does not want «strangle the goose that lays the golden eggs», therefore will not act radically.

However, experts warn that the days of uncontrolled growth are likely over..

As for Ant Group, the company will likely be allowed to hold an IPO as soon as regulators finish antitrust investigations and deal with consumer privacy issues, he said. Kevin Kwek, Managing Director and Senior Analyst Alliance Bernstein.

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