(Bloomberg) – Fintech giant Ant Group Co.’s rating has been downgraded again by Fidelity Investments, more than two years after the Chinese government torpedoed its record IPO.
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Boston-based Fidelity cut its estimate for Ant by about 9% to about $63.8 billion from late November through late May, according to Bloomberg calculations based on filings. That’s less than $235 billion just before Ant’s IPO halted in November 2020.
Ant has revamped its business to accommodate government demands while awaiting the green light to apply for a financial holding company license that would ensure it can continue its fintech operations. In a sign of progress, regulators recently allowed the company’s consumer credit subsidiary to raise capital, and billionaire Jack Ma said in January he was relinquishing control of Ant.
After the move, the Communist Party chief of Hangzhou, where Ant is based, praised the company for following his lead.
Still, the business is struggling with setbacks stemming from regulatory crackdowns and the slowing economy in China. Earnings fell 63% in the June quarter.
Ant did not immediately respond to an email request for comment outside of normal business hours.
In a filing filed in July, subsidiary Alibaba Group Holding Ltd. reiterated that Ma “intends to reduce and thereafter cap its direct and indirect economic interest in Ant Group over time” to a percentage equivalent to 8.8% does not exceed. After relinquishing control, Ma will also only hold around 6.2% of the voting rights.
Ant chairman Eric Jing said the company would eventually go public, but in January it said it had no plans to go public just yet. The company ran a $45 billion fundraising round in 2015.
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