Taking a Page Out of Alphabet’s Playbook: Alibaba is Splitting Six Ways

Alibaba (NYSE:BABA) — the Chinese Amazon lookalike — is splitting itself into six different units, saying the move is designed to unlock shareholder value.

Alibaba Group will become the holding company — and each unit will have its own CEO and could raise money or go public individually.

Here’s how the new Alibaba will look:

It’s a move similar to Berkshire Hathaway and Alphabet — which own Google, YouTube, Waymo and many others. They can become more agile and efficient as their own units, without competing for resources or waiting for decisions through large bureaucracies.

China playing nice

$BABA is up nearly 50% since last October — but still down 70% since China started cracking down on the company and other tech giants in 2020.

But here’s how that’s changing:

• China wrapped up a two-year-long investigation into internet giants — which sent their stock prices tanking.
• China’s reopening is in full effect — and has set an ambitious 5% GDP growth target this year.

Still, for any international investor, political uncertainty with the Chinese Communist Party continues to be a major risk.

What’s the market saying? China could finally be playing nice as the move signals “less hostility towards its tech giants” — per NWI Management’s managing director of global macro research (Reuters).