Alibaba Shares Jump After Breakup Report

Alibaba, Chinese technology giant shares have risen after it announced a plan to break up the company.

The move comes after reports that Alibaba founder Jack Ma, who has not often been seen in public in the last three years, resurfaced in China this week after a long absence.

Alibaba said the decision to split up the business is the biggest restructuring in its 24-year history.

The firm says five of the six units created by the move will explore raising fresh funding and initial public offering (IPO) options. Alibaba shares gained more than 14% in New York on Tuesday and were more than 13% higher in Hong Kong on Wednesday.

Splitting up will enable chief executives and boards of directors own their Units and will allow them to raise capital and seek stock market listings, except for the online retail platform Taobao Tmall Commerce Group, which will remain wholly owned by Alibaba.

In filings to the US Securities and Exchange Commission and the Hong Kong Stock Exchange, Alibaba said the units will “capture opportunities in their respective markets and industries, thereby unlocking the value of Alibaba Group’s respective businesses”.

China technology analyst Rui Ma said that investors saw value in the restructuring because Alibaba’s business units will be able to grow at their own pace.

She added that each unit will also be more streamlined and “less likely to be subject to antitrust violations”.

The government over a few months has been less harsh on big technology companies. People are wondering if this could be the beginning of a period where the government shifts from being almost an adversary to companies, to actually supporting them,” he added.

Mr. Ma, the 58-year-old founded Alibaba, was the most high-profile Chinese billionaire to disappear amid a crackdown on technology entrepreneurs and has kept a low profile since criticising China’s financial regulators in 2020 before stepping down as the chairman of Alibaba in September 2019.

 

Digivation Network

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