May 31, 2023

Brighton Journal

Complete News World

Alibaba: Chinese technology giant stocks jump after the announcement of the disintegration plan

  • by Annabelle Liang
  • Business reporter

Shares of Chinese tech giant Alibaba jumped after it announced a plan to break up the company.

The company says that five of the six units created by the move will explore the possibility of raising new financing and initial public offering (IPO) options.

Alibaba shares gained more than 14% in New York on Tuesday and gained more than 13% in Hong Kong on Wednesday.

Its US-listed shares have fallen nearly 70% since 2020 on concerns about Beijing’s crackdown on the tech sector.

The move follows reports that Alibaba founder Jack Ma, who has rarely been seen in public in the past three years, reappeared in China this week after a long absence.

The units will have chief executives and boards of directors. They will be allowed to raise capital and seek stock market listings, except for online retail platform Taobao Tmall Commerce Group, which will remain wholly owned by Alibaba.

“The market is the best test, and every trade group and company can seek independent fundraising and IPOs when they are ready,” CEO Daniel Chang said in a letter to employees.

China technology analyst Roy Ma told the BBC that investors saw value in the restructuring because Alibaba’s business units would be able to grow at their own pace.

It added that each unit would be more streamlined and “less vulnerable to antitrust violations.”

He added, “Over the past few months, the government has been less ruthless on big tech companies. People are wondering if this could be the beginning of a period where the government goes from being almost an adversary to corporations, to actually supporting them,” he added. .

The newspaper said he met staff and toured classrooms at the Yunzhou School in Hangzhou, the city where Alibaba is headquartered.

Ma was the most famous Chinese billionaire to disappear amid a crackdown on tech entrepreneurs.

The 58-year-old has kept a low profile since criticizing Chinese financial regulators in 2020. He stepped down as chairman of Alibaba in September 2019.