Ant Group, the Alibaba (NYSE:BABA)-backed fintech company that owns the digital payments platform Alipay, will soon go public in one of the biggest IPOs in history. Dana Blankenhorn has been a financial journalist since 1978. Renaissance isn’t the only fund that’s going to get into Ant Financial. If you’re willing to take those risks, as well as the financial ones, go for it. Alibaba's equity stake in Ant generated 5.32 billion yuan ($752 million) in investment profits, or 4% of its net income, in fiscal 2020. Lastly, investors can wait for Ant's ADR (American Depositary Receipt) to reach U.S. exchanges. Meanwhile, the expansion of Alipay -- which is tightly tethered to Alibaba's online marketplaces and retail stores -- will strengthen Alibaba's ecosystem and widen its moat against Tencent.
Investors probably won't be allocated any IPO shares through those brokerages unless they're already top-tier clients, but they'll be able to buy shares of Ant on the open market.
It also generated fees from the previous profit-sharing agreement in the first half of the year. Alipay served 711 million monthly active users (MAUs) at the end of June, and the app processed 118 trillion yuan ($17.4 trillion) in payments over the past 12 months.
1125 N. Charles St, Baltimore, MD 21201. Goldman Sachs (NYSE:GS) has also joined the syndicate recently. Returns as of 10/23/2020. Ant was valued at $150 billion after its last funding round in 2018 and could hit a valuation of $200 billion in its public debut.
The market value of Ant Group stock after the IPO is likely to be just over half as big as Visa (NYSE:V), which is worth $416 billion. But last September, Alibaba traded those rights for a 33% stake in the company. 2020 InvestorPlace Media, LLC. Read the IPO document first, then call your broker. ADRs are also split into three levels. Follow him on Twitter at, 5 Keys to Find Small Stocks With 10X Potential, The Slide in Netflix Stock Is a Great Investment Opportunity, Louis Navellier and the InvestorPlace Research Staff, Trump vs. Biden: Stocks to Buy No Matter Who Wins the White House, 7 Monster Growth Stocks With Double-Digit Upside, 7 Dividend Stocks To Buy For Big Returns In Your Bank Account, Plug Workhorse Stock into Your Trading Portfolio Because It Is Electric, DiamondPeak Stock Is Revving Up Ahead of Its Lordstown Merger, Why Nio Stock Could Head to Over $40 Next. His latest book is, Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, , essays on technology available at the Amazon Kindle store. Its net profit grew 21% year-over-year to 21.9 billion yuan ($3.2 billion). The problem is that because of the Trump Administration’s Cold War with China, Ant isn’t listing in the U.S.
I have been with Schwab for years. Interactive Brokers trades on both the Shanghai and Hong Kong exchanges, Schwab just in Hong Kong.
However, investors should carefully research the commissions, taxes, and exchange rates before placing any overseas trades. It's unclear if Alibaba will sell any shares of Ant after its IPO, but it will likely remain its top shareholder. All rights reserved.
Rosenbluth's other top picks include the iShares MSCI China ETF (NASDAQ:MCHI) and the SPDR S&P China ETF (NYSEMKT:GXC), which could both add shares of Ant in the months following its IPO. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. This is an exchange-traded fund run by Renaissance Capital, … So far in 2020, GXC is up about 15% while MCHI is up about 8%. Interactive Brokers (NASDAQ:IBKR), Fidelity Investments and Charles Schwab (NASDAQ:SCHW) all offer some Chinese trading services. Cumulative Growth of a $10,000 Investment in Stock Advisor, 4 Ways U.S. Investors Can Get a Piece of Ant Group's IPO @themotleyfool #stocks $BABA $TCEHY $MCHI $GXC $IPOS, Alibaba Grabs Majority Stake in Chinese Supermarket Operator With $3.6 Billion Deal, 3 E-Commerce Stocks That Are Better Than Amazon, Why Analysts Are Falling Over Themselves to Upgrade Alibaba, Copyright, Trademark and Patent Information. His latest book is Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, essays on technology available at the Amazon Kindle store. I call Charlie my bookie. Follow him on Twitter for more updates! 1125 N. Charles St, Baltimore, MD 21201. This year, the brokerage side of these banks are providing the profits, because rates of return on lending are so low. 6 Alternatives for Investors Searching How to Buy the Ant Group IPO, has been a financial journalist since 1978. quotes delayed at least 15 minutes, all others at least 20 minutes. (They can have my Alibaba when they pry it from my cold, dead hands.) Banks and brokers create and market American Depository Receipts (ADRs) on many foreign stocks, including some without U.S. listings.
Technically I don’t own any Alibaba. Ant seems like a promising play on China's growing fintech market, but it will only go public in Hong Kong and Shanghai due to the U.S.-China trade war and the recent threats to delist U.S.-listed Chinese stocks.
Copyright © 2020 InvestorPlace Media, LLC. Alibaba owns about one-third of Ant. Alibaba recently passed Facebook (NASDAQ:FB) to become the fifth most-valuable company in the world, with a market capitalization of $729 billion. Another way to buy into Ant is through the Renaissance Financial IPO ETF (NYSEARCA: IPOS). Buy Renaissance International. Only Level 3 ADRs are allowed to list on the major U.S. exchanges. Level 2 and Level 3 ADRs must file SEC reports, while Level 3 ADRs face the strictest reporting requirements. The trade war has doused hopes for a formal Level 3 ADR listing for Ant, but a Level 1 ADR could still reach the OTC markets through the market middlemen.
A simpler way to invest in Ant is to buy shares of Alibaba. The company, formed by Jack Ma to handle transactions at Alibaba Group Holding (NYSE:BABA), is less a bank or a payments company than a software as a service outfit.
As more than half of IPOS portfolio is in Chinese stocks, Ant stock will undoubtedly find its way there. Alibaba previously held an agreement with Ant which entitled it to 37.5% of its fintech affiliate's pre-tax profits. Invest in Alibaba. Let's conquer your financial goals together...faster. The ETFs … That news might be disappointing to U.S. investors, but there are still four other ways to profit from Ant's upcoming IPO.
At the time of publication, Dana Blankenhorn held a long position in BABA. If Ant’s valuation after the IPO is $225 billion, as expected, Alibaba’s stake is worth $67 billion. After Ant goes public, it’s likely a sponsor will turn up to handle ADR trading. Copyright © ADRs are either sponsored, which means a company officially sets them up with a depositary bank; or unsponsored, which means a broker-dealer sets them up without the company's direct cooperation. The easiest way to get into Ant is to buy Alibaba stock. In addition to financial risks, buying Ant also carries geopolitical risks.
His wheelhouse includes cloud, IoT, analytics, telecom, and gaming related businesses. Many U.S.-based brokers don't offer investors access to the Shanghai and Hong Kong exchanges. I own some ADRs. These range in quality, from companies that offer few financial details to those that offer regular reports. So far in 2020, IPOS is up about 30%. Level 1 ADRs, which are unsponsored and only trade on OTC exchanges, are typically the riskiest because they don't need to file regular reports with the SEC. The IPO will be a major payday for these banks. Article printed from InvestorPlace Media, https://investorplace.com/2020/09/6-ways-how-to-buy-the-ant-group-ipo/. A simpler way to invest in Ant is to buy shares of Alibaba.
See you at the top! All rights reserved.
ETFs (exchange-traded funds) that focus on recent IPOs and Asian markets will also likely add shares of Ant to their portfolios. Ant will fall in the latter group. A final way to get a taste of Ant is through the big U.S. banks that are sponsoring the Hong Kong listing. The Ascent is The Motley Fool's new personal finance brand devoted to helping you live a richer life. Nasdaq
However, three notable brokers -- Interactive Brokers, Fidelity, and Charles Schwab -- allow U.S. investors to buy shares in Hong Kong. Market data powered by FactSet and Web Financial Group. Unless you’re an extra-large client at one of these brokers, it’s unlikely you can get IPO shares, but you can still trade after the offering.
However, these ETFs all own large baskets of stocks, which would limit their overall exposure to Ant, and charge expense ratios between 0.6%-0.8%. Some of that recent rise, 27% so far in 2020, is fueled by its stake in Ant. The SPDR funds are run by S&P Global (NASDAQ:SPGI), iShares by Blackrock (NYSE:BLK). Another way to buy into Ant is through the Renaissance Financial IPO ETF (NYSEARCA:IPOS). Leo is a tech and consumer goods specialist who has covered the crossroads of Wall Street and Silicon Valley since 2012.