2023-11-16 22:19:07
The Chinese e-commerce giant Ali Baba has decided to suspend the plan to segregate its cloud business and convert it into an independent listed company. The restrictions introduced by the US on the export of microchips The latest technology forces the Chinese giant in the process of business diversification to recalculate its path. Last October, the US expanded its export control rules to further restrict exports to China of advanced computer microprocessors and semiconductor manufacturing equipment. The company reported this Thursday that JC Properties and JSP Investment, the family trusts of the co-founder of Alibaba, Jack Ma, plan to reduce their holdings of company shares next week with the sale of 10 million shares, valued at 870.7 million dollars (802 million euros). Specifically, each of Jack Ma’s family investment vehicles plans to divest five million shares of Ali Baba, as recorded in the records of the United States Securities Commission (SEC), which explains that “the sale of shares is carried out in connection with a divestiture plan dated August 16, 2023.” Alibaba shares listed on the New York Stock Exchange fell 10.1% this Thursday (9.65% at 8 p.m. in Spain).
Strategy change
The escalation of the fight between the United States and China for technological dominance has triggered one of the most surprising corporate strategy shifts as Alibaba’s cloud business was valued at $11 billion. “The recent expansion of US restrictions on the export of advanced computer chips has created uncertainties about the prospects of Cloud Intelligence Group,” the Chinese company acknowledged in a statement. Alibaba believes that a complete spin-off of its cloud business may not achieve the desired effect of improving shareholder value: “We believe that these new restrictions may materially and adversely affect Cloud Intelligence Group’s ability to offer products and services and perform under existing contracts, thereby negatively affecting our results of operations and financial condition,” Alibaba said.
The Wall Street response Alibaba’s turnaround was rapid, with the biggest drop in more than a year. The company is still trying to recover from the pandemic and is far from Amazon in quality of service or efficiency of its offer as a global e-commerce platform.
The Chinese company’s turnover in the first half (until September) reached 458,946 million yuan (58,308 million euros), 11.2% more thane a year earlier, including a growth of 8.5% in the second fiscal quarter, up to 224,790 million yuan (28,559 million euros). Between July and September, Alibaba managed to close the quarter with an attributable net profit of 27,706 million yuan (3,519 million euros) in contrast to the losses of 20,561 million yuan (2,612 million euros) in the second fiscal quarter of the previous year.
Visable
Alibaba, parent company Aliexpress, despite these setbacks and changes in direction, it does not stand still. This same week he announced the purchase of business-to-business e-commerce platform operator Visable. This signature is consistent with Alibaba’s expansion strategies in the business market, a bridge for the rest of the group’s services. Platforms operated by Visable GmbH include wlw (‘Wer liefert was’), currently the leading B2B platform in the DA-CH region, and the European B2B platform europages, on which around three million companies are registered. Together, the platforms reach three million B2B buyers a month seeking detailed information about companies and products. The platforms register around 266,000 search queries per day. With its online marketing services, Visable offers businesses additional opportunities to increase their reach on the internet.
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