Chinese e-commerce leader Alibaba Group is beginning the first steps in a planned restructuring. The holding company recently decided on an initial public offering of its logistics and product divisions and at the same time allocated an amount of $12 billion to invest in its cloud business. Such measures are the beginning of the first phase of the company's long-awaited unbundling to revive slowing revenue growth.
The company intends to transform its cloud services division into a stand-alone company through a stock split as early as 2024. Experts speculate that such a complete spin-off of Alibaba's largest cloud services platform as a dividend to shareholders could mean the company will likely relinquish control of one of its fastest-growing businesses in the near term. The spinoff of the cloud platform could one day even surpass Alibaba in size, provided the necessary outside financing is raised.
Our analysts on this situation concluded that such a "stand-alone" cloud business could operate at a disadvantage to competitors supported by the government seeking to exercise control over data storage and Internet services. Nevertheless, Alibaba's fiscal Q4 drop in direct sales raises the need for the company to bring in new strategic investors to grow its cloud business in the coming year. After all, these manipulations will activate the market and enable various operations to move more quickly, thereby stimulating growth in the stock.
The company intends to transform its cloud services division into a stand-alone company through a stock split as early as 2024. Experts speculate that such a complete spin-off of Alibaba's largest cloud services platform as a dividend to shareholders could mean the company will likely relinquish control of one of its fastest-growing businesses in the near term. The spinoff of the cloud platform could one day even surpass Alibaba in size, provided the necessary outside financing is raised.
Our analysts on this situation concluded that such a "stand-alone" cloud business could operate at a disadvantage to competitors supported by the government seeking to exercise control over data storage and Internet services. Nevertheless, Alibaba's fiscal Q4 drop in direct sales raises the need for the company to bring in new strategic investors to grow its cloud business in the coming year. After all, these manipulations will activate the market and enable various operations to move more quickly, thereby stimulating growth in the stock.