Briefing: Qudian shares plummet as Ant Financial to end partnership by August

Qudian Shares Slides to All-Time Low as Investors Sweat on Alipay Partnership-Yicai Global

What happened: Shares of Chinese micro-lender Qudian plunged to their lowest price since its listing over concerns that Ant Financial will not renew its strategic partnership with the cash loan lender when their deal ends this week. Qudian’s CFO said in an earnings call that the termination of the partnership is not expected to hurt the company’s business, but the market seemed unconvinced.

Why it’s important: The previous partnership with Ant Financial’s Alipay allows Qudian access to potential borrowers through the country’s largest third-party payment app. After the splashy IPO in October last year, the company soon come under fire as local media begun questioning the sustainability, validity and morality of their business. These scandals may contribute to Ant Financial’s decision to stop further partnership with Qudian. In response of the market fluctuations, the company defends that over 30% of its new browsers in the past eight months are acquired through Ant Financial partnership, but it only contributed a mere 2% of Qudian’s total transaction volume. The rest of more than 60% come from the platform.