Why you should look into Alibaba?
Alibaba $Alibaba(BABA.US$ $BABA-SW(09988.HK$ $BABA-SWR(89988.HK$split is happening soon. The company plans to split into six business groups, each having the option to raise funding from outside and go public. Here’s why you should closely consider investing in Alibaba.
Brilliant investors like Joel Greenblatt gave five reasons why a parent company might spin off a subsidiary:
1. Conglomerates usually trade at a lower value than the sum of their parts. By separating unrelated businesses, the company can unlock their true value.
2. To separate a “bad” business from a “good” one.
3. To get value from a subsidiary that’s hard to sell.
4. To recognize value while avoiding a large tax bill that would come with selling the subsidiary instead of spinning it off.
5. To overcome regulatory obstacles, such as addressing antitrust concerns during an acquisition.
After a spinoff, the new company’s management is free from the parent company’s restrictions and can make changes to benefit shareholders, especially if they own a significant portion of the new company’s stock.
The e-commerce giant Alibaba announced in March it will split into six business units, each with its own CEO and board of directors, and adopt a holding company management model, in the biggest revamp of its 24-year history.
1. The Taobao Tmall Commerce Group covers Alibaba’s domestic-facing e-commerce marketplaces, which make up over two-thirds of Alibaba’s total revenue.
2. Alibaba’s Global Digital Commerce Group includes its overseas e-commerce marketplaces such as Lazada, which serves Southeast Asia, and AliExpress, which has become popular in Russia, Latin America, and parts of Europe.
3. Alibaba’s Cloud Intelligence Group includes Aliyun, the company’s cloud computing unit. The company is the dominant player in China’s domestic cloud computing sector, with a 36% market share, according to research firm Canalys.
4. Local Services Group includes food and grocery delivery services such as Alibaba’s Ele.me app as well as Amap, its mapping app.
5. Cainiao Smart Logistics
Alibaba formed Cainiao in 2013 by making investments in a number of Chinese logistics companies. The unit is now a major logistics provider in its own right in China, serving both Alibaba and third-party customers. Cainiao makes up 7% of Alibaba’s total revenue.
6. Alibaba’s Digital Media and Entertainment Group will house Youku, the company’s YouTube-esque streaming video site, as well as Alibaba Pictures, its film production unit.
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Btan : Price still very stable. Not like before it will drop to 70s. Better buy now before all measures by CCP comes in.
beedeebee : Alibaba will still be the holding company after stock split right? Is it just giving each business unit its rights to raise money from the market? Will this mother share be split into 6 or remain as a mother stock holding all 6 business arm?
HopelessChi beedeebee: they vote pledge assure to spin off but to split a organisation it can take years to seek a underwriter and boost valuation which is now chinese companies is at its lowest. what cheap can be cheaper
73407951 beedeebee: The new “1+6+N” business cluster has basically taken shape. The board of directors of each business group has begun operation, and multiple business listing and financing plans have also been launched. The holding group will mainly assume the role of a base for innovation incubation