The Alibaba Group Holding Ltd – ADR (NYSE: BABA) stock price was trading slightly during premarket trading after announcing that its outgoing CEO, Daniel Zhang, would also be stepping down from his role as CEO and Chairman of its Cloud Intelligence Business unit.
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The move surprised investors, given that Zhang was initially meant to step down from his role as CEO and Chairman of Alibaba Group but was expected to retain his seat as CEO and Chairman of the Cloud Intelligence Business, which is gearing up for a potential IPO after the massive restructuring in March this year.
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The March restructuring saw Alibaba split into six different businesses, with the ultimate goal of finally spinning off most of the businesses into independent publicly listed companies. Alibaba announced that incoming CEO Eddie Wu, one of the company’s co-founders, would also temporarily take over as CEO and Chairman of the cloud business.
Daniel Zhang was expected to resign from his post yesterday, September 10, 2023, and the Group now has a new CEO and Chair, Eddie Wu. Some analysts have expressed concern that the cloud business CEO's sudden departure could delay the business's planned IPO.
Alibaba will now have to recruit a new management team for its cloud business, starting with the CEO, which might lengthen the time it takes to list the business publicly. The Group has also expanded its leadership by separating the CEO and Chairman roles.
As Eddie Wu takes over as CEO and Director of Alibaba Group, Joseph Tsai has been appointed as Chairman, and the two executives have taken on their new roles this week. Investors will wait to see how the new CEO steers the company amid significant economic challenges.
For example, China’s slow economic growth has negatively impacted the company’s business, and the situation is not improving. The company has also faced more onerous regulations from Beijing.
Alibaba said: “The board of our Company expresses its deepest appreciation to Mr. Zhang for his contributions to Alibaba Group over the past 16 years. The Company will continue to execute its previously announced plan to spin off Alibaba Cloud Intelligence Group under a separate management team to be appointed.”
Alibaba stock price.
The Alibaba stock price was trading down 0.66% at $89.46, falling from Friday’s closing price of $90.05.
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