- Alibaba Group Holding Limited BABA stock declined on Tuesday following reports of the downsizing of its cloud division's workforce by 7% as it prepared for a spinoff and eventual IPO.
- China's largest cloud service has begun offering severance to employees or transfers to other parts of the Alibaba empire, Bloomberg cites knowledgeable sources.
- Alibaba aims to entirely carve out its cloud unit into a separate company within a year.
- Alibaba Cloud is one of the biggest companies likely for creation via a six-way split of the parent, joining other units like the Cainiao logistics division and international commerce to pursue independent fundraising and potential listings.
- Some analysts valued the cloud business at over $30 billion, a prime beneficiary of a post-ChatGPT upswell that depends on cloud resources to train next-generation AI models.
- Alibaba picked the cloud unit as an early IPO candidate due to its more developed business model and customer profile.
- The IPO also fueled speculations of the firm succumbing to market or political realities.
- Susquehanna analyst Shyam Patil maintains Alibaba with a Positive, lowering the price target from $175 to $160.
- Price Action: BABA shares traded lower by 1.57% at $84.75 premarket on the last check Tuesday.
- Photo by Fooksou Lamimo via Wikimedia Commons
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