An unexpected change in top leadership at a major business unit was the reason for Alibaba (NYSE: BABA) stock’s slide on Monday. The Chinese tech giant’s shares lost 1.5% of their value on the news, contrasting unfavorably with the 0.7% gain of the benchmark S&P 500 index.
The news concerned outgoing CEO Daniel Zhang. Alibaba announced on Sunday that Zhang would not remain at the company as the leader of its cloud intelligence group.
In July, Alibaba revealed via an official letter from Zhang that he would step down from his position as company CEO, but stay on as CEO of its cloud business.
The resignation, which was surprising to most Alibaba investors and observers, took effect on Sunday.
In a tersely worded press release, the tech company said that incoming company CEO Eddie Yongming Wu has also taken the reins of the cloud intelligence group. Alibaba aims to spin off this business unit into a separate, publicly traded company.
Alibaba’s cloud business is a monster entity all its own, as it is the leading provider of such services in the massive Chinese market. The spinoff is part of a broader move to restructure Alibaba’s operations, which will see the company be divided into six distinct entities. Each is to have its own CEO and board of directors.
While Zhang’s departure was a surprise, at least he’s being replaced by a known figure at Alibaba in the person of Wu. The company did not, however, make it clear whether Wu would be taking the leadership position at cloud intelligence group on a temporary or permanent basis.
10 stocks we like better than Alibaba Group
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now… and Alibaba Group wasn’t one of them! That’s right — they think these 10 stocks are even better buys.
*Stock Advisor returns as of September 11, 2023
Blog powered by G6
Disclaimer! A guest author has made this post. G6 has not checked the post. its content and attachments and under no circumstances will G6 be held responsible or liable in any way for any claims, damages, losses, expenses, costs or liabilities whatsoever (including, without limitation, any direct or indirect damages for loss of profits, business interruption or loss of information) resulting or arising directly or indirectly from your use of or inability to use this website or any websites linked to it, or from your reliance on the information and material on this website, even if the G6 has been advised of the possibility of such damages in advance.
For any inquiries, please contact [email protected]