Alibaba Group Holding Ltd BABA stock was trading lower Monday following a confusing couple of days concerning iconic Alibaba founder and Executive Chairman Jack Ma’s future with the company.
What Happened
The New York Times reported Friday that Ma was planning to retire Monday. On Saturday, a spokesperson from Alibaba told The South China Morning Post the Times report was “factually wrong” and Ma is simply unveiling a long-term management succession strategy for the company, but will remain with the company as a lifetime member of the Alibaba Partnership, a group of 36 senior management members who are responsible for maintaining the Alibaba culture.
The Alibaba spokesperson said the Times’ language that Ma is “stepping down” and planning to “retire” were taken out of context.
The Post is owned by Alibaba.
Why It’s Important
On Monday, Ma said he plans to begin “passing the Alibaba torch” to a new generation of leaders by stepping down from his role as chairman of Alibaba in exactly one year. Alibaba CEO Daniel Zhang will take over Ma’s position as chairman.
Ma, who founded Alibaba in 1999, made his retirement announcement on his 54th birthday. Zhang is eight years his junior at 46.
As of Monday morning, the Times has not noted any updates to its original story, which said Ma planned to “step down from the Chinese e-commerce giant on Monday to pursue philanthropy in education” and “is retiring as China’s business environment has soured.”
What’s Next
Alibaba investors will be watching closely to see if Ma or Alibaba provide any additional details about his long-term role with the company beyond the next year. In his announcement, Ma said no company can rely on its founders forever.
“A sustainable Alibaba would have to be built on sound governance, culture-centric philosophy, and consistency in developing talent,” he said.
Disclosure: the author is long BABA stock.
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Alibaba Executive Chairman Jack Ma speaks during the Gateway '17 conference in Detroit. Photo by Dustin Blitchok.
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