Alibaba stock slides after ex-CEO abruptly quits cloud unit ahead of IPO
Timilehin Adejumobi
1 min read
Alibaba’s stock lost more than 4% in Hong Kong on Monday after ex-group CEO Daniel Zhang quit just two months after concentrating his focus on cloud computing, raising concern over the unit’s spin-off plan and possibility of discord at the top.
New group CEO Eddie Wu will concurrently become acting CEO and chairman of a unit grappling with weak sales growth ahead of an initial public offering (IPO) penned for next year.
“We have mixed thoughts on this news,” said Morningstar analyst Chelsey Tam in a client note. “We think this latest change was not planned back in June and there are concerns of disagreements among Alibaba’s partners.”
In June, Alibaba (9988.HK) said Zhang would relinquish his group CEO role to focus on the cloud unit, the firm’s number two money spinner.
The Cloud Intelligence Group, valued at $41 billion to $60 billion earlier this year, is among five units Alibaba is spinning off as part of the biggest restructuring of its 24-year history.
Alibaba said it will continue with its plan to spin off the cloud unit under a yet-to-be-appointed management team. Earlier this year, it said it would complete the process by May 2024.
Citi analyst Alicia Yap in a note said Zhang’s departure could drag on Alibaba stock until a successor is named.
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