On October 24, 2020, Jack Ma, Founder and CEO of Alibaba, made a speech criticizing the Chinese government, which included concerns for the younger generation. Speculation suggested that Jack was “disappeared” the next day, and BABA share price plummeted 81% from $319 to $61 over a two-year decline, wiping out $344 billion in market cap.
Since then, BABA has struggled to regain market share, clawing back to today’s $92, but is still tracking negative 2.5% against the Hang Seng Tech index. With nothing significant appeasing shareholders, a call for a change has been announced, and that change is the replacement of Daniel Zhang, Chairman, and Chief Executive Officer.
In addition to the management restructuring, Jack Ma’s legacy is being sliced and diced into six autonomous business units. As with Ma’s speech, big news usually has a big effect on a share price, but so far BABA charts show nothing significant. Is it business as usual for the e-commerce giant, or is a massive price action about to drop? Traders might consider closely following Alibaba news in the coming weeks, at the ready for a sentiment shift as more information comes to light about the new plans. To get you off to a good start, here’s what the Wall Street Journal had to say about Alibaba’s management shuffle.
Alibaba Says Chairman and CEO Daniel Zhang Will Be Replaced
Changes at the top to take place in September. Chinese e-commerce giant Alibaba Group Holding is reshuffling its top executives, with current Vice Chairman Joseph Tsai taking over as chairman from Daniel Zhang while the head of its domestic e-commerce unit was named chief executive. The changes at the top, effective on Sept. 10, come as Alibaba undergoes a major reorganization that effectively dismantles the business empire that co-founder Jack Ma built over two decades. Alibaba is in the process of splitting itself into six independently run companies that could seek separate IPOs. Eddie Yongming Wu, who heads the Taobao and Tmall domestic e-commerce business, will succeed Zhang as chief executive and replace Zhang on the board, the company said in a statement Tuesday.
“It is the right time for me to dedicate my full attention and time to the [cloud] business,” Zhang said in a letter to employees that was seen by The Wall Street Journal.
In May, Alibaba said it planned to fully spin off its cloud business and complete its public listing in the next 12 months. Zhang is currently heading the cloud unit and will continue to do so, the company said. Alibaba didn’t immediately respond to a request for comment on Zhang’s letter. Alibaba’s restructuring culminates a yearslong shift inside the company to make it more nimble after Ma stepped back from the company’s helm in 2019. Under the restructuring, Alibaba’s various businesses will be split up into six major areas: cloud computing, Chinese e-commerce, global e-commerce, digital mapping and food delivery, logistics and media and entertainment. Trade BABA and other top stocks with Exness and enjoy real-time news and price alerts using the Exness Trade app.
