What Happened: Ma’s 10% stake in Ant will drop to 6.2% under the proposed plan, Reuters reported. His related entities also have equity interests in Ant, which together give him a controlling stake in the fintech company, that will change as part of the overhaul, the report said.
The development could pave the way for Ant to revive its shelved initial public offering, analysts said, according to Reuters.
The shelving of the IPO was seen as the government’s move to clamp down on high-profile companies in a bid to rein them in and check their growth. Regulators also wanted Ant to organize itself as a financial holding company, which would bring it under additional regulatory scrutiny and stricter capital control norms.
See also: Best Chinese Stocks
What’s Next: The company has announced a corporate restructuring initiative, including the formation of new committees and adjustment to voting rights.
The change in the controlling structure, however, could delay the IPO due to listing regulations, which dictate that companies wanting to list on the domestic A-share market should wait for three years after a change in control, Reuters said. The waiting period is two years to list on the STAR market and one year for the Hong Kong Stock Exchange.
Alibaba closed Friday’s session 2.70% higher at $107.40, according to Benzinga Pro data.
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