Alibaba Group Holding Ltd – ADR (NYSE: BABA) jumps around 10% in pre trading session on Tuesday as the company aims to split into six units and explore fundraising or listing for most of them, the company said on Tuesday, in a major overhaul as Beijing pledges to ease a crackdown. far-reaching regulation and support for their private companies. Alibaba shares listed in the US have increased for 8 years. Alibaba shares have fallen about 70% since the regulatory crackdown began in late 2020.
China’s e-commerce conglomerate has undergone the largest reorganization in its 24-year history, splitting it into six entities: Cloud Intelligence Group, Taobao Tmall Commerce Group, Local Services Group, Cainiao Smart Logistics Group, Global Digital Commerce Group and Digital Media said to be divided into Entertainment is divided into groups.
The group’s overhaul comes a day after founder Jack Ma returned from a long year abroad and as Beijing seeks to spur private-sector growth after two years of a regulatory crackdown on companies. their leading private company. “The original purpose and fundamental goal of this reform is to make our organization more agile, shorten the decision-making relationship and react more quickly,” Zhang said in a letter. sent to employees obtained by Reuters.
The group’s overhaul comes a day after founder Jack Ma returned from a long year abroad and as Beijing seeks to spur private-sector growth after two years of a regulatory crackdown on companies. their leading private company. “The original purpose and fundamental goal of this reform is to make our organization more agile, shorten the decision-making relationship and react more quickly,” Zhang said in a letter. sent to employees obtained by Reuters.
The exception will be Taobao Tmall Commercial Group which operates its business in China and will remain a 100% owned unit of Alibaba Group. Zhang also said the company would “lighten and streamline” middle-office and back-office functions, but did not detail the job cuts.
Investors said the announcement fueled concerns that Alibaba had lost its growth potential and suggested regulatory concerns were easing. “Unleash the added value,” said Kenny Ng, a strategist at China Everbright Securities in Hong Kong.
Investors will have a more optimistic outlook on Alibaba with this anticipation. “It could signify a fresh phase of growth for the company and alleviate concerns about regulatory hurdles.”
