Fidelity Investments has slashed its estimate of Ant Group Co’s (螞蟻集團) valuation for at least the second time this year, underscoring the deteriorating outlook for Jack Ma’s (馬雲) fintech giant as the Chinese government ramps up regulation of the industry.
The Boston-based firm’s valuation of its Ant holdings at the end of June implied a total market capitalization of about US$78 billion, regulatory filings compiled by Bloomberg showed.
That was down from US$144 billion in February and US$235 billion just before Ant’s initial public offering (IPO) was abruptly suspended by regulators in early November last year.
Another filing showed that Fidelity might have reduced its valuation even further in July, to about US$67 billion.
The limited scope of that month’s disclosure makes it difficult to know whether the drop reflected a valuation cut or a change in fund holdings.
The move could add pressure for other investors to adjust their valuations for Ant, although many global funds have kept their estimates within a range of US$170 billion to US$190 billion.
The future of Ma’s company has been shrouded in uncertainty as Chinese regulators increase scrutiny of the country’s billionaires, sort through details of a fintech industry overhaul, and implement new rules on data security and IPOs.
Ant, which named a new chief executive officer in March, has committed to drastically revamping its business.
BlackRock Inc assigned Ant a valuation of US$174 billion, its filing showed on Aug. 26.
T Rowe Price Group Inc set it at US$189 billion, its filing showed on Aug. 25.
Goldman Sachs Group Inc said in an Aug. 4 research report that it estimated the company was worth US$173 billion.
Ant is still waiting for an official sign-off on its government-mandated transformation into a financial holding company, a structure that would dramatically increase its capital requirements and restrain its ability to grow.
Authorities have ordered Ant to open its payments app to competitors and improve data protections. The company would also need to reduce the size of its main money market fund — once the world’s largest — and sever some ties between its payments platform and other financial services.
Fidelity’s valuation for Ant in June was 48 percent lower than when it invested in the company in 2018. Other big investors include Warburg Pincus, Carlyle Group and Temasek Holdings.
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