Source: Jinrong Iie (Financial World)
On March 30, Jinrong Iie (Financial World) released an article stating that Chinese tech giant Alibaba’s plan to split into six separate subsidiaries could inspire US tech groups like Amazon and Alphabet.
Shares of Alibaba jumped 14.3 percent on Tuesday after announcing the plan, which would allow each division to raise its own capital and even go public.
Alibaba’s stock price plummeted from over $300 at the end of 2020 to around $100. Investors seem to like the idea that its parts are worth more than their sum. These units will focus on cloud computing, digital commerce, digital media, logistics and local services.
Shopping platforms Taobao and Tmall will remain wholly owned by Alibaba. Yong Zhang will remain chairman and CEO of the holding company and oversee the cloud computing division, which he became president in December.
Amazon also owns cloud businesses—Amazon Web Services, a movie studio, logistics assets, Internet retail, Internet advertising, and third-party retail services. Spin-off expert Jim Osman estimates that AWS itself could be worth $200 a share, compared with Amazon’s current share price of $97.
Alphabet is also on Osman’s shortlist for a potential spinoff, especially as its dominant advertising business comes under intense antitrust scrutiny. He believes that Google should consider spinning off YouTube to create shareholder value.