Innovation Economics Presentation Transcript for Ant Group

Innovation Economics Presentation Transcript
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1.Background on the Ant Group Company 
* Ant Group is a Chinese FinTech company and part of the Zhejiang Alibaba e-commerce company.
* The digital financial services company focused on being competitive using power on AI, Cloud, and blockchain systems.
* Ant started as the platform for processing Alibaba payments and became the largest fintech in the world.
* After Ant Group emerged from Alipay, the company allowed buyers and sellers on the Taobao platform to transact and be one of the most popular digital payment platforms. 
* The Alibaba payment affiliate also operates in the credit, savings, and insurance markets.
* Ant Group sought to list the company's shares on the Hong Kong and Shanghai Stock Exchanges.
Information on the IPO
* The Ant Group was the biggest IPO in history when there is the digitization of financial services and rapid Chinese adoption of information technology in various areas of society.
* Jack Ma, Alibaba's founder, was the largest individual shareholder who would benefit if Ant Group went public.
Hypothesis
* Financial regulators actions and decisions influence the success of IPO performance 
* A company’s performance before the IPO compared to the industry performance influences an IPO’s underperformance or success
2. Reasons For Going Public 
2.1 The case for analyzing Ant Group’s IPO
* Ant Group was set to be the biggest IPO on record, and there was already oversubscription by the retail and institutional investors before the intended listing. 
* Zhu & Chatterjee (2020) reported a $3 trillion retail demand in the company’s IPO, indicating investor sentiment that the company was a good investment opportunity. 
* The company reported 72.5 billion yuan ($10.50 billion) revenue in the first six months of 2020, higher than the first and second half years of 2019 (Zhu & Yang, 2020).
* Ant Group’s main sources of revenue are Alipay, the digital payment and merchant service platform and technology service fees,
* Ant Group was the market leader in digital finance technology, and the company’s IPO success would signal growing confidence in using fintech technology and innovation.
Excerpt: the World’s Largest IPOs Adjusted for Inflation
Source: /worlds-largest-ipos-adjusted-for-inflation/
Raising funds and investments 
* As a big Chinese tech company, there was a need for growth, and one way to finance growth was through the IPO.
* While an IPO is mainly meant to raise capital, the company also sought additional investment where there is the lower cost of capital. 
* The Ant Group wanted to be listed and raise $35 billion from the IPO, and the company did not go to the New York Stock Exchange, one of the popular stock exchanges for large IPOs.
* The company would be able to obtain more liquidity through third parties and would create value for the company to improve service delivery and infrastructure.
* The Hong Kong stock exchange attracts investors from all over the world, and there are fewer stringent regulations than the regulations in mainland ...