Alibaba Group announced on May 18 that its subsidiary Alibaba Cloud will be completely spun off from Alibaba Group within the next 12 months and go public independently; its subsidiaries Cainiao and Hema will start listing plans. The former is expected to complete the IPO in the next 12 to 18 months, and the latter is expected to complete the IPO in the next 6 to 12 months.
Alibaba stated in its financial report that the group’s board of directors approved the distribution of dividends to shareholders to realize the complete spin-off of Cloud Smart Group. As part of the spin-off plan, Cloud Smart Group will seek to become an independent public company.
On March 28, Zhang Yong, chairman and CEO of Alibaba Group, issued a letter to all employees, announcing the launch of the “1+6+N” organizational reform. After this organizational change, Alibaba Group will fully implement holding company management.
Under the Alibaba Group, six business groups and multiple business companies will be established, including Alibaba Cloud Intelligence, Taobao Tmall Business, Local Life, Cainiao, International Digital Commerce, and Grand Entertainment. After the reorganization, each business group will have It has its own chief executive officer and board of directors, and can independently raise funds and go public.
However, Ali’s spin-off and listing plan did not immediately inject a boost to the capital market. As of the close of U.S. stocks on May 18, Ali’s stock price fell 5.47% to $85.72 per share. Some U.S. stock analysts said, “The market still needs to wait and see about Ali.”
Analysis: Alibaba’s split was planned by Beijing
The New York Times analyzed that this major reorganization indicates the possibility of the disintegration of China’s largest e-commerce company. He also believes that Alibaba’s decision to split the company into several entities may ease Chinese authorities’ concerns about the concentration of power and influence in the hands of domestic Internet giants.
The New York Times quoted Graham Webster, editor-in-chief of the Digital China Project at the Cyber Policy Center of Stanford University, as saying that splitting Alibaba into different business lines could protect the entire enterprise from the government’s future crackdown on specific industries.
“Splitting the company into different parts seems to be in line with the general desire to avoid antitrust scrutiny, which is not only a problem that Alibaba has been facing, but also a problem for other companies in China,” he said.
On March 27, Ma Yun, who had been traveling overseas for a long time, suddenly appeared in a high-profile school in Hangzhou. Soon after, it was reported that he was hired as an honorary professor by the University of Hong Kong and a visiting professor at Tokyo University of Tokyo, Japan. disappear. Last week, Ma made another appearance in mainland China since Alibaba Group announced plans to spin off. Although Ma Yun has retired from the company, as a person who is still one of the company’s largest individual shareholders, the reappearance of Ma Yun and the news of Alibaba’s spin-off seem to coincide too well in time.
Reuters quoted people familiar with the matter as saying that Li Qiang, the new Premier of the State Council, had been asking Ma Yun to return to China since the end of last year. Li Qiang believes that this will help calm the outside world‘s concerns about the CCP’s crackdown on private enterprises.
CNN recently quoted Brock Silvers, chief investment officer of Kaiyuan Capital, a Hong Kong-based private equity firm, as saying, “It seems that Beijing has planned the split of Alibaba.”
Silvers said the breakup of Alibaba appeared to be an effort by authorities to “rein in the influence of tech giants,” a stark reminder of the troubling relationship between the CCP and the private sector despite recent assurances from Beijing. .
Hong Hao, chief economist of GROW Investment Group (GROW), believes that Beijing may need Alibaba now, but it cannot make it as strong as before. “Alibaba’s restructuring provides a way to limit monopoly power and platform influence,” he said.
Hong Hao believes that Alibaba may become a model for other Chinese technology giants that the Chinese Communist Party hopes to transform. “Tencent is clearly next,” he said. At present, Tencent has begun to reduce the stake in its portfolio companies, and food delivery company Meituan has also made the same move.