Alibaba, the Chinese e-commerce and financial giant, is planning to spin off some of its business units as independent entities to increase their flexibility and optimize their value. The move comes as Alibaba emerges from regulatory crackdowns that have affected the Chinese tech industry. The company has announced a plan to split into six main groups, paving the way for stock listings of some of its companies. Alibaba CEO Daniel Zhang said the firm would become a holding company that would be the controlling shareholder of the business group companies. Alibaba’s stock prices in Hong Kong and New York have rallied nearly 15% since the announcement.
Jack Ma’s criticism of China’s regulatory system during a speech in Shanghai in November 2020 led to a sharp backlash from the Chinese government, which resulted in the suspension of Ant Group’s planned $34.5 billion IPO just days before it was scheduled to take place. Ma disappeared from public view for several months following the incident, and there was widespread speculation about his whereabouts and whether he had fallen afoul of the government. However, he re-emerged in January 2021, and his recent return to China is seen as a positive development for Alibaba, which has faced increased regulatory scrutiny over the past year.