Alibaba (BABA.US) announced yesterday that it will split its company into six units, each of which will have the ability to raise external financing and go public, as part of a reorganization of the Chinese e-commerce giant. Each business group will be managed by its own CEO and board of directors. Alibaba said in a statement that the move is "designed to unlock shareholder value and promote market competitiveness." As a result, Alibaba shares shot up more than 14% on the NYSE.
The move comes after a tough few years for Alibaba, which has faced a domestic economic slowdown and tighter regulation from Beijing. Alibaba has struggled with growth over the past few quarters. With the reorganization, this trend is set to change.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile appThe business groups will be focused around the company's strategic priorities, which will be divided as follows:
Cloud Intelligence Group: Alibaba CEO Daniel Zhang will head this group, which will include the company's cloud and artificial intelligence projects.
Taobao Tmall Commerce Group: This will include the company's online shopping platforms, including Taobao and Tmall.
Local Services Group: Yu Yongfu will be CEO, and operations will include Alibaba-owned food delivery service Ele.me, as well as its mapping.
Cainiao Smart Logistics: Wan Lin will continue as CEO of this business, which houses Alibaba's logistics service
Global Digital Commerce Group: Jiang Fan will serve as CEO. This unit comprises Alibaba's international e-commerce divisions, including AliExpress and Lazada.
Digital Media and Entertainment Group: Fan Luyuan will be CEO of the unit, which includes Alibaba's streaming and movie business.
Each of these units may aim to raise funds independently and go public when ready, Zhang said.
The exception is Taobao Tmall Commerce Group, which will remain wholly owned by Alibaba.
Source: xStation
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.