Why Are Alibaba Shares Trading Lower Premarket?

Alibaba Group Holding Ltd BABA Chair and CEO Daniel Zhang handed power to the heads of the company's business units to potentially open the way for spinoffs, the Wall Street Journal reports.

• The units likely for spinoffs include Cainiao Smart Logistics Network, grocery chain Freshippo, a local services department comprising several of Alibaba's location-based service apps, and overseas e-commerce platforms Lazada and Trendyol.
• Zhang delegated more responsibility to presidents at each business line who now function as "mini-CEOs."
• The management shift reverses a centralization drive known as Alibaba Economy, which former boss Jack Ma began almost three years ago. 
• Zhang aims to speed up decision-making to better fend off competition, revitalize flagging sales and reshape its unified image amid China's regulatory crackdown.
• Alibaba's fintech affiliate Ant Group has started to distance itself from Alibaba, as Ant restructures its businesses to comply with China's regulations to gear up again for its IPO.
• Currently, Zhang directly oversees the e-commerce business. Other business units like industrial and community e-commerce, cloud computing, and local services have their presidents. 
• JD.com Inc JD and Pinduoduo Inc PDD eclipsed Alibaba's market share in online retailing via aggressive discounts and socializing features. Ele.me, an Alibaba delivery platform, is struggling to compete against Meituan MPNGY. Alibaba is also coming under pressure in cloud computing.
• Related: Why Are DiDi Global Shares Plunging Today?
• Price Action: BABA shares traded lower by 3.55% at $131.68 in the premarket session on the last check Friday.
• Photo by Rico Shen via Wikimedia