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Alibaba shares sink following Ant Group IPO suspension

Jack Ma's Ant Group suspended its IPO in Shanghai and Hong Kong markets. Yahoo Finance's Dan Roberts shares the details.

Video Transcript

AKIKO FUJITA: Let's move on to shares of Alibaba right now down more than 6%. This coming on the back of news we got out of Asia today that the Shanghai exchange and the Hong Kong exchange have both suspended that roughly $35 billion IPO scheduled for Ant Group. Those shares were expected to start trading on Thursday.

Ant Group releasing a statement earlier today that reads in part, "Ant Group sincerely apologizes to you"-- this is addressed the investors-- "for any inconvenience caused by this development. We will properly handle the follow-up matters in accordance with applicable regulations of the two stock exchanges."

Let's bring in Dan Roberts who has been tracking this story for us. Dan, and, you know, some context here. There was a meeting between Jack Ma and those executives from Ant Group yesterday with regulators. We saw a number of media outlets report that. What do we know that happened there that led to the suspension?

DAN ROBERTS: Well, clearly, Akiko, even though the exact details aren't out, this is politics. I mean, this is quite a turn for this company. You and I know we've been waiting for and anticipating this IPO. And by the way, the fact that this is happening on US election day, I think in many ways this very important story is going to get a little buried today. I'm glad we're talking about it, but this is a story that's going to continue to be significant for global tech.

Something happened at that meeting, but it's also worth mentioning that Jack Ma about a month earlier had made a speech where he dinged Chinese banking regulations. He also said that Chinese banks operate like pawn shops. So I don't think those comments went over well.

I think we should make sure that we caveat to viewers that these regulators had previously approved of the dual listing in Shanghai and in Hong Kong. So something changed. Was it Jack Ma's comments a month ago? Was it something that got said at that meeting? And that meeting was with Jack Ma and two other Ant Group executives.

Now what's interesting-- and I'm sure you saw this-- but the prior comment from Ant Group yesterday about that meeting had kind of a very neutral, euphemistic, cute line that said there was discussion about financial regulations and the current system in China. I'm sure there was. But Jack Ma said something that did not go over well.

What's interesting also is that the Shanghai regulators are trying to give their reasoning, their stated reasoning as the fact that Ant Group didn't properly disclose to investors that meeting yesterday, and that's interesting as well. I'm sure that's just kind of a pro forma reasoning.

I think the question now-- and I'm not sure if you mentioned-- they've also suspended the Hong Kong listing for now, and they're going to have to give back those funds. It was so oversubscribed. $37 billion was set to be the big number here, eclipsing Saudi Aramco.

So the big question now is will the listings happen? Is there a change that Ant Group can make, either to its business or its disclosures or its accounting practices, that will get those regulators to say, OK, now you can move forward, or is it just going to be off entirely?