Alibaba Group Holding Ltd (BABA)

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Jack Ma Is Poised to Cede Control of Fintech Giant Ant. What It Means for Alibaba
By: Barron's | July 28, 2022

Chinese billionaire Jack Ma plans to cede control of Ant Group, according to The Wall Street Journal.

The fintech powerhouse is looking to distance itself from tech giant Alibaba, which Ma founded, after a prolonged period of regulatory pressures, the report says.

Ma could relinquish his control over Ant by transferring some of his voting power to other company leaders, the Journal reported, citing multiple anonymous sources.

Ma is a founder at both Alibaba (ticker: BABA) and Ant—which is behind the popular Alipay payments network—and currently controls more than 50% of the fintech group’s shares through an entity in which he has a majority position.

Ending Ma’s dominance at Ant became an urgent matter amid the tough regulatory environment facing Chinese tech companies, which has pushed Ant and Alibaba to cut their ties, the Journal reported.

This includes the termination of commercial and data-sharing agreements, which gave Alibaba an edge.

The Chinese tech sector has been under intense regulatory pressures over the past 18 months, with shares in Alibaba losing almost half of their value in 2021 amid concerns over possible delistings in the U.S. and tough antimonopoly measures in China. In many ways, the wave of regulatory scrutiny on the sector started in late 2020, when Chinese authorities scuttled Ant Group’s plans to go public.

Shares in Alibaba fell 0.5% in U.S. premarket trading following the news.

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