Good news for Alibaba

Good news for Alibaba

2022-12-16 • Dikemaskini

Alibaba’s affiliate Ant company may become the largest IPO not only now, but also in the entire history. Let’s discuss what it may mean for traders.

What is Ant?

Jack Ma founded both Ant Group and Alibaba, the latter has a 33% stake in the fintech firm. Ant Group, or, as it is sometimes called, Alibaba’s fintech arm, is China’s leading mobile payments company. Notably, Ant’s main payments service, Alipay, has 900 million users in China and over 1 billion worldwide. Unlike the rest of the world, just a small part of the Chinese population uses credit cards. Instead of that, they prefer app-based payments. Here’s the most interesting thing: once people download Alipay, Ant will offer them other products and services - both financial and non-financial. It is an online mall providing anything from loans and travel services to delivery services. Therefore, people got used to the whole ecosystem and will unlikely change it in the future. Therein lies the uniqueness and success of this company.

What happened?

All this fuss is because Ant Group is preparing to list shares simultaneously in Hong Kong and Shanghai. The dual listing may drive the company even above Saudi Aramco’s record of 29 billion dollars IPO. Analysts widely expect that the firm will reach a value of 225 billion dollars, if it really raises 30 billion dollars in the listing on the Hong Kong stock exchange and Shanghai’s Star market. Ant is growing quite fast. It announced a revenue of 17 billion dollars last year, that is a 40% increase from 2018 levels. Let’s look at the charts.

Technical tips

Alibaba has risen significantly in 2020. The coming announcement may drive the stock even higher. If it breaks out the $280 mark, it will open doors towards the key psychological level of $300. Otherwise, if it falls below the support of $270, it may dip down to the next one at $260.

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