Sentiment of the Alibaba growth has spread throughout the Chinese region, with shares of other competing firms plunging following the news.
Shares of the Chinese multinational e-commerce and tech giant Alibaba Group Holding Limited (HKG: 9988) is trading today at a very high growth rate as a company Said It is restructuring its business into 6 separate independent divisions. Shares listed in Hong Kong rose 12.23% to HKD94.55.
According For the company, the 6 subdivisions will help uncover its shareholder value and each of them could lead to an initial public offering (IPO).IPO) whenever they are ready. Subdivisions include the Cloud Intelligence Group which covers the firm’s cloud and artificial intelligence engagements.
The second subdivision is Taobao Tmall Commerce Group which will cater to all online shopping platforms including Alibaba’s Taobao and Tmall. Plus, the firm spun off Local Services Group, an organization that covers Alibaba’s food delivery service Ele.me as well as its mapping.
Alibaba also revealed that Cainiao Smart Logistics will meet all of its logistics demands with the Global Digital Commerce Group, which will focus on its cross-country e-commerce business, including AliExpress and Lazada. The sixth entity is the Digital Media and Entertainment Group which will henceforth handle its streaming and movie ventures.
Alibaba is undoubtedly one of the top drivers of the Chinese tech sector and the divestment of its unit has been classified as an active sacrifice of its own to elude regulators. The rise in the company’s shares has been described as a significant relief for investors, rather than on optimism for imminent growth.
“The rally in stocks is not so much because the market expects more profitability, but rather because tensions with the regulator have been resolved,” said Guy Spier, a value investor and follower of Warren Buffett.
Alibaba restructuring and main beneficiaries
The restructuring of the Alibaba business will greatly benefit Chinese consumers as the divestment will open up more competition across the board. This position was supported by Spire, who believed the move would be better for the entire Chinese tech ecosystem.
“It sets the stage for a more innovative Chinese tech sector and far more competition – so great for Chinese consumers,” he said, adding that it “reduces the concentration and power of one business within China.” is — which was making Chinese regulators uneasy.”
Sentiment of the Alibaba growth has spread throughout the Chinese region, with shares of other competing firms plunging following the news. While JD.com Inc (HKG: 9618) gained 1.92% as competition for its e-commerce business eases, Tencent Holdings Limited (HKG:0700) also registered a rise of 1.75% to join the uptrend.
“I think investors are saying what we saw in Alibaba, really the leader in China’s tech, that their plans can be used by others,” Brendan Ahern, CIO of Craneshare, noted in Tencent, JD.com said pointing to the ADR moves made. and Baidu.
Benjamin Godfrey is a blockchain enthusiast and journalist who loves to write about real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desire to educate people about cryptocurrencies drives his contributions to well-known blockchain-based media and sites. Benjamin Godfrey is a lover of sports and agriculture.
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