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Alibaba Group Holdings Ltd (NYSE:BABA)-backed Ant Group’s valuation could potentially plummet to as low as $29 billion, according to Bloomberg Intelligence analyst Francis Chan.
What Happened: The company’s valuation could drop to a range of $29 billion to $115 billion, from $320 billion in November when the company was forced to scrap its record initial public offering, a Bloomberg report on the matter said.
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The steep fall in valuation is expected as the Chinese company becomes a financial holding firm that’s regulated more like a bank — lowering its revenue growth significantly and profits, according to Chan.
Jack Ma’s Ant and China’s other fintech giants have faced multiple setbacks due to regulatory curbs ranging from online lending to payments, wealth management, and insurance.
See Also: Why Alibaba Just Got Hit With A Record $2.87 Billion Fine In China
Ant’s consumer lending units Huabei and Jiebei could be hit with their links being removed from Alipay, which has at least a billion users.
Ant’s valuation may not top even $75 billion if it is continued to be treated as a traditional lender, as per Chan.
Why It Matters: Alibaba was earlier this month slapped with a record $2.8 billion fine by China’s regulators who after a monopoly probe found that the company had abused its dominant market position.
Alibaba had last year come under the Chinese regulatory spotlight after its co-founder Ma, the country’s most-famed billionaire, made comments that were critical of Chinese regulations at an event in Shanghai in October.
Price Action: Shares of Alibaba closed 0.27% lower at $232.70 on Monday.
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.