Alibaba Stock Up on Split Into Six Units, Unlocking Value for Shareholders

  • Post category:Stock Trading
  • Reading time:5 mins read
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Alibaba stock ripped higher on March 28, 2023, after the company announced that it would split into 6 different parts. Alibaba is a Chinese multinational technology company that operates multiple businesses in various sectors such as e-commerce, retail, cloud computing, digital media and entertainment, and fintech. The company primarily operates through its online platforms, including Taobao, Tmall, and, which connect buyers and sellers globally. Alibaba also provides payment and financial tools through Alipay and Ant Financial, and offers cloud computing services through Alibaba Cloud. The company is one of the largest e-commerce platforms in the world and has a significant influence on the global economy.

Alibaba Plans To Split Into 6 Different Units

Alibaba (NYSE:BABA) announced plans to divide the company into six distinct units on March 28, 2023. This action should be very advantageous for shareholders and has the potential to unlock value. Additionally, it might lessen regulatory risks in the future.

BABA creates a situation where investors will find it simpler to invest in the precise business units they prefer by dividing the company into separate units. Value investors can invest in the slower-growing, more lucrative business units of the company in its current form, while growth investors can choose the business units with the highest growth rates.

The SEC filing shows the 6 different units BABA stock will be split into:

Under this plan, we will have six major business groups and other investments, each to be independently managed by its own chief executive officer and board of directors. The six major business groups that we plan to establish are:

1.  Cloud Intelligence Group (including cloud, AI, DingTalk and other businesses), with Daniel Zhang serving as chief executive officer in addition to his responsibilities as Alibaba Group’s chairman and chief executive officer;

2.  Taobao Tmall Business Group (including Taobao, Tmall, Taobao Deals, Taocaicai, and other businesses), with Trudy Dai serving as chief executive officer;

3.  Local Services Group (including Amap, and other businesses), with Yongfu Yu serving as chief executive officer;

4.  Global Digital Business Group (including Lazada, AliExpress, Trendyol, Daraz, and other businesses), with Fan Jiang serving as chief executive officer;

5.  Cainiao Smart Logistics, with Lin Wan serving as chief executive officer; and

6.  Digital Media and Entertainment Group (including Youku, Alibaba Pictures and other businesses), with Luyuan Fan serving as chief executive officer.

Truist comments on Alibaba reorganization

According to Truist, Alibaba has declared its intention to restructure into six business groups. Daniel Zhang will continue to serve as Chairman and CEO of Alibaba Group following a holding company management model, while each of the six business groups will be managed by its own CEO and, importantly, board of directors. Truist notes that this corporate structure has been adopted gradually by the business and that it practically corresponds to its segment reporting. The firm believes Alibaba’s reorganization will drive greater accountability near-term, and unlock shareholder value long-term. With a $130 price target, Truist has given the shares a Buy rating.

Alibaba split comments from Morgan Stanley

After Alibaba announced that it would split into six units, Morgan Stanley analyst Gary Yu called the restructuring a significant positive catalyst and told investors that there is potential to unlock significant value given that the market assigns zero value to the ex-core e-commerce businesses. Morgan Stanley has an Overweight rating and a $150 price target on Alibaba shares and claims that its sum-of-the-parts based bull value of $200 per share implies an upside of at least 100%.

Alibaba Stock Chart

Alibaba stock retook its 200 day moving average on March 28, 2023. Alibaba stock also formed a downtrend channel breakout pattern. The stock is in a technical weak uptrend.

Alibaba stock chart on March 28 2023 retaking its 200 day moving average on a downtrend channel breakout
Alibaba stock chart on March 28, 2023, retaking its 200 day moving average on a downtrend channel breakout
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