Alibaba (NYSE: BABA) stock was on an upswing in pre-market trading on Monday after BABA’s affiliate, Ant Group announced that Jack Ma would give up control of Ant Group.
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Jack Ma has founded both Alibaba and Ant Group. The Chinese billionaire will cede 34% control of two holding companies that collectively have a 53.5% stake in Ant Group, as indicated by the graphic below from Ant Group website.
Ant Group stated that it was making these changes to “further enhance the transparency and effectiveness of our corporate governance and strengthen our independence from our shareholder, Alibaba Group.”
After Ma cedes control of the two holding companies, the billionaire and his partners would vote independently and would have a stake of 20% each in one of the holding companies that own 31.04% of Ant Group. This would result in Ma effectively having a stake of only 6% in Ant. This is explained in more detail by the below graphic from the Ant Group website.
There is the possibility that this news could help Ant Group when it comes to its capital raise of $1.5 billion. It is because when Ant Group was looking at going public through one of the world’s largest IPOs looking at raising a staggering $34.5 billion back in 2020, Ma had, unfortunately, fallen out of favor with Chinese regulators and the Government after he criticized them in a speech.
This resulted in Ant’s previous IPO getting canceled.
Ma’s BABA stock has not fared better and shares have slid more than 16% in the past year.
