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Alibaba stock jumps 10% as the Chinese tech giant begins its biggest reorganization ever and eyes new IPOs

jack maJack Ma

Ruben Sprich/Reuters

  • Alibaba stock jumped more than 10% after the company announced its largest overhaul ever.
  • Alibaba will split into six independent entities, opening the door to new IPOs as well.
  • The news comes one day after cofounder Jack Ma was seen back in China after roughly a year away.

Shares of Alibaba Group Holding jumped 10% Tuesday following the company’s announcement that it would begin its largest restructuring ever.

The news comes just a day after cofounder Jack Ma was seen in China for the first time in nearly a year after Beijing’s crackdown on top tech firms.

Alibaba plans to divide its business into six independently operated entities: cloud, Chinese e-commerce, global e-commerce, digital mapping and food delivery, logistics, and media and entertainment.

Each division will have its own chief executive and board of directors, and each will be able to raise funds and pursue initial public offerings when ready. Alibaba Group will become a holding company run by current Chairman and CEO Daniel Zhang. 

“This transformation will empower all our businesses to become more agile, enhance decision-making and enable faster responses to market changes,” Zhang wrote in a letter to employees, according to reports.

The reorganization also addresses one of Beijing’s political goals of minimizing overly-concentrated power in individual tech companies. That suggests Alibaba’s plan to split into six units will garner support from the Chinese government, which has previously been critical of Ma’s empire. 

Before Tuesday, Alibaba stock had shed roughly 6.4% year-to-date, and was down about 25% over the last 12 months.

Read the original article on Business Insider
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