Alibaba Group Holdings, Inc. BABA shares have been languishing since late 2021 amid worries concerning regulatory scrutiny, a slowdown in the domestic economy, and U.S. delisting risk.
The Jack Ma-founded company announced plans to overhaul its business into six independently-run entities, namely:
- Cloud Intelligence
- E-commerce business comprising its Taobao-Tmall, Cainiao logistics business
- Local Services group,
- Global Digital Business Group
- Digital Media and Entertainment Group
Alibaba will follow a holding company pattern, with all the six splintered companies functioning as independent ones with separate CEOs. under the parent company, reports said, citing the company's letter to employees.
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Daniel Zhang, currently serving as CEO and chairman of the e-commerce giant, will continue to hold the same positions in the holding company.
Alibaba’s reorganization will help unlock value, said Thomas Hayes, founder of Hedge Funds Tips.
“This is a huge move for shareholders, enabling 'sum of the parts' valuation to be realized on a much faster timeline,” he added.
In premarket trading on Tuesday, Alibaba stock rose 7.81% to $92.85, according to Benzinga Pro data.
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