- By Annabelle Liang
- Business Correspondent
Shares of Chinese tech giant Alibaba rose after it announced plans to break up the company.
Five of the six units created by the move will explore raising new funds and initial public offering (IPO) options, the company says.
Alibaba shares were up more than 14% in New York on Tuesday and more than 13% in Hong Kong on Wednesday.
Its US-listed shares have fallen nearly 70% since 2020 on concerns about Beijing’s crackdown on the tech sector.
The move follows reports that Alibaba founder Jack Ma, who has been rarely seen in public for the past three years, reappeared in China this week after a long absence.
Units have their own chief executives and boards of directors. Online retail platform Taobao will be wholly owned by Alibaba, except for the Tmall trading group.
“The market is the best litmus test, and each business group and company can pursue independent fundraising and IPOs when they are ready,” Chief Executive Daniel Zhang said in a letter to employees.
China technology analyst Rui Ma told the BBC that investors saw value in the restructuring because Alibaba’s business units could grow at their own pace.
He said each unit was highly regulated and “subject to unbelievable breaches”.
Alibaba’s restructuring comes after years of tough restrictions on Chinese tech companies, said Scott Kessler, global sector leader for technology, media and telecommunications at investment research firm Third Bridge.
“For the past few months, the government has been cracking down on big tech companies. People are wondering if this is the beginning of an era where the government is almost an enemy of companies and actually supports them,” he added. .
He met with staff and toured classrooms at Yungu School in Hangzhou, the city where Alibaba is headquartered, the newspaper said.
Mr Ma is the highest-profile Chinese billionaire to disappear amid a crackdown on tech entrepreneurs.
The 58-year-old has kept a low profile since criticizing China’s financial regulators in 2020. He stepped down as chairman of Alibaba in September 2019.