Alibaba Gains on End of Ant’s Regulatory Probe

Alibaba (BABA:US) shares are moving higher on Friday trading after several media outlets reported that China is finally set to end the regulatory probe of the company’s high-growth fintech business Ant Group.

The fintech startup in which Alibaba has a sizable stake is set to be fined at least 8 billion yuan ($1.1 billion), according to CNBC. The fine is expected to be official in the coming days. Didi Global, a China-based ride-sharing business, was fined $1.2 billion in 2022.

This way, China is set to conclude the regulatory probe, which started back in 2020 when the country’s top regulatory body moved to stop the $37 billion IPO at the last moment. CNBC reports that some investors valued Ant at over $300 billion in 2020.

Despite a large fine, investors are positive as the end of the regulatory probe finally removes an overhang on Alibaba stock. The conclusion of the regulatory process also paves the way for Ant Group to secure a financial holding company license, which could ultimately allow the fintech startup to pursue the IPO path.

This marks another positive for Alibaba stock after the tech business announced a major transformation that will break the company up into 6 independent businesses. Still, shares traded around 3% lower year-to-date through Thursday’s close, as investors continue to have concerns over the slowing growth in the core E-commerce business.

Senator John Hickenlooper announced in May that he sold some Alibaba shares. Last year, Congressman Jim Langevin was also selling BABA stock, while Senator Tommy Tuberville disclosed he was purchasing the stock options in early 2022.