Major changes are underway at Alibaba (BABA), China’s best known e-commerce company, which was founded 24 years ago by Jack Ma.
And this time, Ma is hoping for better results. The last time Alibaba made a big move to reorganize its business, the company set in motion a chain of events that led to a proverbial train wreck—a clash with Chinese regulators, the disastrous cancellation of what would have been the world’s biggest IPO (of its fintech unit Ant Group), and a crackdown by the government on Big Tech.
This time around, Alibaba hopes to please both investors and Beijing bureaucrats with a major restructuring into six business units.
In a way, it’s reminiscent of the forced breakup of the old “Ma Bell” telecommunication system by the U.S. government (a consent decree signed on January 8, 1982) into seven regional “Baby Bells” that were ultimately formed in 1984.
Let’s take a look…
BABA’s Restructuring
It appears that Alibaba presented its restructuring plan to China’s regulators before announcing it publicly and received positive feedback from Chinese regulators that remain eager to see China’s tech giants slim down their empires.
The company portrayed the revamp, in which Alibaba itself would become a holding company, as a way to “unlock shareholder value and foster market competitiveness.”
Alibaba certainly needed to do something. Its shares had lost more than…
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