Alibaba CEO Daniel Zhang Yong speaks through the launching ceremony of Alibaba Rural Vitalization Fund on May 17, 2021 in Lanzhou, Gansu Province of China.
Vcg | Visual China Group | Getty Images
In a surprise leadership reshuffle in June, Alibaba announced that Zhang was bowing out as each CEO and chairman on Sept. 10 to give attention to the cloud intelligence business.
Co-founder Wu would turn out to be CEO and director, while one other co-founder, Joseph Tsai, might be chairman from September, the e-commerce giant said at the moment.
Zhang was Alibaba Group CEO since 2015 and the group chairman since 2019. He has also been chairman and CEO of the Alibaba Cloud Intelligence Group since 2022.
“The board of our Company expresses its deepest appreciation to Mr. Zhang for his contributions to Alibaba Group over the past 16 years,” Alibaba said within the Sunday statement.
What it means for Alibaba Cloud IPO
In May, Alibaba also announced plans to spin off its cloud division as a separate, publicly traded company.
In a serious restructuring plan in March, Alibaba split into six business groups in March, paving the best way for every unit to boost outside funding and go public.
The surprise announcement will weigh on Alibaba’s share price within the near term until a recent successor is called, Citi analyst Alicia Yap said in note on Monday.
“Investors could also be concerned that the timing and technique of AliCloud’s spin-off could also be affected,” she explained. Nonetheless, she maintained a “buy” rating on Alibaba’s stock and a goal price of $151 — that is 67% higher that the stock’s last close of $90.05 on the Recent York Stock exchange.
Citi will proceed to observe developments and await any recent announcement, she added, citing key downside risks for the corporate, including a failure in executing its recent retail strategy, in addition to investment spend and margins pressure turn out to be worse than expected.
Zhang will proceed to contribute to Alibaba by “channeling his expertise otherwise,” in response to an internal letter to staff seen by Reuters, which reportedly said Alibaba will invest $1 billion in a technology fund that Zhang would establish.
“The Company will proceed to execute its previously announced plan to spin off Alibaba Cloud Intelligence Group under a separate management team to be appointed,” subject to the restructuring plan and relevant approvals, Alibaba has said.
Alibaba has faced slowing economic growth at home and tougher regulation from Beijing, leading to billions being wiped off its share price.