The Alibaba Spinoff Trade Loses More Steam
livemint.comAn unexpected twist to Alibaba’s changing of the guard—and a drip feed of other bad news—has undermined the bullish sentiment surrounding the Chinese e-commerce giant earlier this year. And given how China-adverse investors have become, it may be tough to reverse that without an all-clear for the economy more broadly—especially since Alibaba executives may be tempted to slow-walk restructuring plans as long as China’s stock markets remain in the doldrums. Alibaba’s Hong Kong-listed shares fell 3% Monday in the wake of two potentially significant developments: a report from Bloomberg, citing sources, that the firm would put on hold a potential IPO of its Freshippo grocery chain, and a surprise personnel change.
Alibaba declined to comment on the Bloomberg report. Alibaba’s leadership reshuffle, which became official Sunday, is no surprise: It has been telegraphed for months. Daniel Zhang formally stepped down as Alibaba’s chairman and chief executive officer, replaced by Brooklyn Nets owner Joe Tsai and Eddie Wu respectively.
What was unexpected was that Zhang also resigned from his separate roles as chairman and chief executive of Alibaba’s cloud business. Zhang had, as recently as June, framed his plan to resign as Alibaba chief as a means to focus squarely on the cloud business. Instead Wu, the incoming Alibaba CEO, will take over Zhang’s roles at the cloud unit too.
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