Alibaba Calls It Splits

In a post-Jack Ma era of slower growth, Chinese e-commerce giant Alibaba is turning to financial engineering to drive value. 📝

Today the company outlined the most significant reorganization in its history, designed to unlock shareholder value and foster market competitiveness. The business will be split into six separate companies, each led by its own CEO and board of directors. 🧑‍💼

They each revolve around strategic priorities, including:

  1. Cloud Intelligence Group – Cloud and artificial intelligence (AI) activities.
  2. Taobao Tmall Commerce Group – Online shopping platforms, including Taobao and Tmall.
  3. Local Services Group – Food delivery service and mapping.
  4. Cainiao Smart Logistics – Alibaba’s logistics service.
  5. Global Digital Commerce Group – International e-commerce businesses, including AliExpress and Lazada.
  6. Digital Media and Entertainment Group – Streaming and movie business.

Each unit will be able to pursue independent fundraising and public listings if/when ready. However, Taobao Tmall Commerce Group will remain a wholly-owned subsidiary of Alibaba. 🛒

With growth slowing across the business, the move should give each unit the flexibility to win in its competitive markets. It should also reduce the regulatory headwinds Alibaba dealt with as a massive conglomerate.

$BABA shares rallied 15% on the news. However, they’re still trading at their late-2014 IPO levels. 🔻

Turnaround Catalyst Or $WISHful Thinking?

Market participants love to trade what’s moving. And sometimes stocks move for very interesting reasons. Let’s take a look at two examples from today. 👀

First up is National CineMedia, which filed a voluntary Chapter 11 petition. The largest movie-theater advertising business in North America has entered into a restructuring agreement with its lenders. This follows news that one of its largest shareholders and customers, Regal parent Cineworld, has presented a restructuring plan of its own to emerge from bankruptcy. 🎥

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Apple Targets A Recyclable Tech Future

The world is clearly headed toward a technology-driven future, even more so than it already is. 💽

But a primary inhibitor of mass-technology adoption (and cost) is the raw materials required to make the inputs. So as tech giants built out their supply chains and infrastructure, they realized the critical role that recycling would play.

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Could “AI” Stand For Accounting Irregularities?

AI stocks are all the craze recently, including, which has experienced a significant run-up. However, one short seller’s report took shares down sharply this week after alleging “serious accounting and disclosure issues” at the company. ⚠️

Kerrisdale Capital is a well-known hedge fund that often takes activist short positions. It initially released its bearish thesis towards on March 6th, 2023. In it, Kerrisdale claims that the company is misrepresenting itself as an AI firm. Instead, it suggests management is simply positioning the company to benefit from investors’ current hype around the industry.

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