Shannon Brandao
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"🤓🇨🇳📰 Jack Ma is walking away from #Alibaba, and the optics are terrible.
Jack Ma's family trust announced with its SEC filings last week that it plans to sell 10 million shares of Alibaba for about $871 million, Reuters reported.
On the same day, Alibaba 'stunned investors' by canceling 'plans to spin off its #cloud #business and paused the listing of its #supermarket unit amid waning #investor enthusiasm for the Chinese #ecommerce group's radical restructuring plan,' Financial Times said.
The company’s official reasons for its disappointing news were related to regulatory uncertainty stemming from geopolitical tensions.
'Alibaba blamed U.S. export controls for the reversal, and said the Biden administration’s expanding restrictions on selling advanced chips to #China have created uncertainties for its cloud #computing unit,' Forbes analysts wrote.
But Shen Meng, managing director at boutique investment bank Chanson & Co., told Forbes that 'China’s tightening laws governing the protection of data might prevent the unit from pursuing an offering in #HongKong,' which could deny it, according to recent valuations, a much needed $55 billion cash injection.
The company has been posting losses for the last few quarters after economic recovery from China's covid curbs failed to impress and management was reshuffled.
And shifting the blame for the ditched cloud business plans could just be a #propaganda spin coming from the firm’s tightly-controlled publicity department.
Following the filings, 'Jack Ma’s office said the founder of Alibaba Group Holding remains "very positive" about one of China’s biggest #technology companies, giving the #market the assurance after a sell-off of the company’s shares weighed on Hong Kong’s key #stock index,' South China Morning News staff reported.
In August, FT revealed that 'well-regarded' economists have been strictly instructed 'to avoid discussing negative trends' in China's #economy.
'You’ve got an economic slowdown that would worry any country, coupled with a China that always likes to put on a brave face to the world and a #leadership that is particularly image-conscious. Put those three factors together and it’s the recipe for a very non-transparent economy,' Andrew Collier, managing director of Orient Capital Research in Hong Kong, said."
#news #business #geopolitics