Alibaba shares surged Tuesday after the Chinese tech giant announced it would split into six entities – including one dedicated to cloud computing – that will explore fundraising including possible IPOs.
US-listed shares of Alibaba (ticker: BABA) rose 8.8% as investors digested the biggest corporate governance reform in the 24-year history of one of China’s most important companies — with important implications for investors.
Alibaba…
Alibaba shares surged Tuesday after the Chinese tech giant announced it would split into six entities – including one dedicated to cloud computing – that will explore fundraising including possible IPOs.
US-listed shares of Alibaba (ticker: BABA) rose 8.8% as investors digested the biggest corporate governance reform in the 24-year history of one of China’s most important companies — with important implications for investors.
Alibaba will move to a holding company model comprised of six entities: its high-growth cloud computing and intelligence group; a global digital commerce arm; a unit focused on digital media and entertainment; a trading entity that owns the stores of Taobab and Tmall; Cainiao intelligent logistics; and a local service company. All six groups will have the flexibility to raise debt capital and seek IPOs, with the exception of Taobao/Tmall, which will remain wholly owned by the company, Alibaba said.
“The market is the best litmus test, and any business group and company can conduct independent fundraising and IPOs when they are ready,” CEO Daniel Zhang said in a statement.
Each company will have its own CEO and board of directors, with Zhang continuing to serve as chairman and CEO of the holding company, as well as CEO of the cloud business. Alibaba shares will continue to be listed in New York and Hong Kong, Alibaba-owned South China Morning Post reported.
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