Six Split – Alibaba’s Unique Decision ✂

Six Split – Alibaba’s Unique Decision

Alibaba is the most-known Chinese company in the world, one of the byproducts of China’s rapid economic growth over the past few decades. Although China was founded on Communist values, loose regulations have allowed corporations like Alibaba to grow exponentially and bring the economy forward, especially the tech sector, and this was spearheaded by well-known businessman Jack Ma who is currently the 36th richest person in the world. His wealth was much higher when Alibaba was at its peak of $800 billion in value, but that declined rapidly due to a couple of reasons. Chinese regulators started to severely crack down on tech companies as President Xi strengthened his hold on the economy, and US regulators started to threaten Chinese companies and their listings on American stock exchanges. Ma has stepped down as a result, and Alibaba has entered a new era.

One of the most defining moments of this new leadership occurred on Tuesday as Alibaba announced that they will split into six independently-run companies, a major left turn from Ma’s strategy to centralize the company and create the “Alibaba Economy”. These six areas will be cloud computing, logistics, media and entertainment, Chinese e-commerce, global e-commerce, and digital mapping and food delivery. This essentially turns Alibaba into a holding company, and it is a great strategy by CEO Daniel Zhang to adapt with changing Chinese regulations as a centralized Alibaba was viewed as too powerful. Under the plan, all 6 companies will have their own CEO that reports to the board of directors, and they could seek separate IPOs and raise external capital. Part of the strategy is so each piece of Alibaba can address the issues that are currently plaguing them, and it makes for an interesting proposal to large companies in the United States. Investors are curious as to whether businesses like Alphabet or Amazon might undergo a similar process, and it’ll be interesting to see the reactions as investors loved the move by Alibaba, sending their shares up higher.

Want to learn how to invest? Download the Invstr app, where you can play Fantasy Finance and manage a virtual investment portfolio or open a brokerage account and invest for real. Take our interactive investing course on Invstr Academy and become a better investor today!

I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.

Share:
More Posts
OPEC’s Decision 🛢
1 December, 2023

OPEC leaders just hosted an important late-November meeting that may signal a change in strategy.

Load More
Get your daily Invstr Crunch

Get the market news and updates you need, delivered to your inbox or available on our daily podcast.

Facebook Twitter Youtube Instagram Snapchat Tiktok
learn
products
plan
Who we are
blog

Risk Disclosure:

Invstr is not a bank and banking services are provided by Vast Bank, N.A.

Brokerage and Banking services are currently only available to U.S. residents.

Invstr app and web services are provided by Invstr Ltd. Advisory services are provided by Invstr Financial LLC, an investment adviser registered with the Securities Exchange Commission (SEC) details of which can be obtained here. Securities brokerage and custody services are provided by Apex Clearing, a broker dealer registered with the SEC and a member of FINRA and SIPC. There is no bank guarantee on securities and securities may lose value.

Investing involves risk and can lead to losses. Past performance does not guarantee future results.

Invstr app and web services are provided by Invstr Ltd. Invstr+ advisory services are provided by Invstr Financial LLC, an investment adviser registered with the Securities Exchange Commission (SEC). Securities brokerage and custody services are provided by Apex Clearing, a broker dealer registered with the SEC and a member of FINRA and SIPC. There is no bank guarantee on securities and securities may lose value. Vast Bank N.A. a nationally chartered bank and member of the FDIC, provides the banking products, including the products and services related to digital asset accounts. As with any asset, the value of Digital assets can go up or down and there can be a substantial risk that you lose money buying or holding digital assets. You should carefully consider whether trading or holding Digital assets is suitable for you in light of your financial condition. Your digital account does not support wallet to wallet transferring of your digital assets (i.e. cryptocurrencies) outside the platform. Any Digital Assets in your digital asset account are not insured by any government entities, including but not limited to FDIC or SIPC. The Invstr Visa® Debit Card is issued by Vast Bank, N.A. pursuant to a license from Visa U.S.A Inc and may be used everywhere Visa debit cards are accepted. Invstr Ltd, Invstr Financial LLC and Invstr Securities Ltd are subsidiaries of Marketspringpad Holdings (collectively “Invstr”) and Invstr is solely responsible for the application services and website content.

Watchlists provided when users first access the service are not a recommendation to invest. Instead they are provided to help users better navigate the service. Users are free to edit and create their own watchlists. From time to time, Invstr will suggest instruments solely based on an individual’s interest and the interest levels of the Invstr community. The statistical and portfolio builder models generated by Invstr do not reflect actual investment results and are not guarantees of future results. Comments provided by Invstr leaders, influencers or members of the Invstr Community are not recommendations and should not be construed as such. Invstr does not endorse the content or the positions posted by them. Their investment approach, and that of the models provided by Invstr, may be different from yours and may not be appropriate for you.