Alibaba and Tencent invested in hundreds of startups over the years, often helping shape entire segments of the consumer internet from ride-hailing to grocery delivery.Īlibaba’s restructuring marks a departure from the internet company’s traditional preference for keeping most of its operations under one roof, running everything from supermarkets to datacenters under the main Alibaba umbrella. Xi Jinping’s administration had long criticized the influence of online platforms, worried that concentrating power and data among a few tech companies suppresses innovation and threatens the Party’s grip on power. The shift to a holding company structure is rare for major Chinese tech firms and could present a template for peers such as WeChat operator Tencent. also surged, on anticipation that Alibaba’s peers might explore similar actions in a loosened regulatory regime. Its shares soared over 16% in Hong Kong, a tad more than it managed in New York, adding more than $30 billion to its market value. In executing the biggest overhaul in its history, Alibaba manages to address two objectives that have eluded many of its rivals - appeasing both a government distrustful of Big Tech and investors traumatized by a years-long regulatory crackdown. Alibaba Group Holding Ltd.’s overhaul could serve as a template for a restructuring of China Tech itself: a shake-up that achieves Beijing’s aim of carving up the country’s tech titans while unlocking potentially billions of dollars in pent-up shareholder value.Ĭhina’s online commerce leader surprised markets by announcing Tuesday plans to split its $220 billion empire into six units that will individually raise funds and explore initial public offerings.
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