Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on the day's biggest business stories

Subscribe to Axios Closer for insights into the day’s business news and trends and why they matter

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Stay on top of the latest market trends

Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sports news worthy of your time

Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tech news worthy of your time

Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Get the inside stories

Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Denver news?

Get a daily digest of the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Des Moines news?

Get a daily digest of the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Twin Cities news?

Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Tampa Bay news?

Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Charlotte news?

Get a daily digest of the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sign up for Axios NW Arkansas

Stay up-to-date on the most important and interesting stories affecting NW Arkansas, authored by local reporters

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Illustration: Sarah Grillo/Axios

Jack Ma is brilliant. He's innovative. He's one of the world's richest men, and even has a lovely singing voice.

Driving the news: He also made one of the weightiest unforced errors in the history of global business, scuttling what was expected to be a $35 billion IPO for Chinese financial services company Ant Group.

What happened: Ma recently gave a speech he didn't need to give, at least not one he needed to give yet. He compared Chinese banks to "pawn shops," in terms of collateral required for business borrowers, and denigrated the character and convictions of financial regulators.

The regulators this week fought back, because that's what you do when someone spits in your face. They issued draft rules for online microlending and stricter capital requirements, effectively forcing Ant back to the IPO drawing board.

  • Even more crackdowns could be on the way, with Bloomberg reporting that China's top banking regulator "plans to discourage lenders from using Ant’s platforms."
  • Ma is not formally affiliated with Ant Group, but he's the controlling shareholder and former executive chairman of Alibaba Group, which spun out Ant and retains a one-third stake.

What happens next: A source close to Ant tells me that the company still wants to go public, preferably before the Chinese New Year in early February, but admits that the company is reeling from its reversal of fortune.

  • Ant may be forced to sell its microlending business. It may get treated as a depository institution, even though it argues it's just the software-enabled middleman. It may need to answer tough questions about its leverage ratio, particularly without that incoming $35 billion of new equity.

Axios' Felix Salmon writes that Ant "is one of the most systemically important financial institutions in the world, and at the moment it's barely regulated."

  • "All banks are tech companies, but tech can break. It's okay if a single computer crashes; it's not okay if a country's entire financial system goes down. If a technology company is also a systemically important financial institution, then it needs to be regulated just as assiduously as any other financial-services giant," he adds.

Market forces: This episode creates unexpected challenges for Shanghai's new STAR Market, which had positioned Ant as its Pied Piper for other Chinese tech unicorns.

  • It's possible that companies like Didi Chuxing will give STAR a mulligan, believing the Ant situation to be specific to fintech, but it also may take a fresh look at New York.

The bottom line: Ma's misstep could ultimately be rewarded if Ant and Chinese regulators come to a meeting of the minds, and restructure the company in a way that ensures post-IPO compliance for decades to come. But, at the moment, it appears that he fumbled at the goal line.

Go deeper

Felix Salmon, author of Capital
Jan 14, 2021 - Economy & Business

The complex new landscape of going public

Illustration: Aïda Amer/Axios

The question is no longer whether a company should go public; it's how.

Why it matters: The much-resented traditional IPO, run by Wall Street and largely for Wall Street, now has competition. A lot of it.

Federal judge says Florida ban on "sanctuary cities" racially motivated

Florida Gov. Ron DeSantis. Photo: Joe Raedle/Getty Images

A federal judge on Tuesday struck down parts of a Florida law aimed at banning local governments from establishing "sanctuary city" policies, arguing in part that the law is racially motivated and that it has the support of hate groups.

Why it matters: In a 110-page ruling issued Tuesday, U.S. District Judge Beth Bloom said the law — signed and championed by Gov. Ron DeSantis (R) — violates the Constitution's Equal Protection Clause because it was adopted with discriminatory motives.

Biden steps into the breach

Sen. Joe Manchin heads to a meeting with President Biden today. Photo: Kevin Dietsch/Getty Images

President Biden ramped up the pressure on his fellow Democrats Wednesday, calling a series of lawmakers to the White House in the hope of ending infighting and getting them in line.

Why it matters: Divisions within the party are threatening to derail Biden's top priorities. After several weeks of letting negotiations play out, the president is finally asserting his power to ensure his own party doesn't block his agenda.