Alibaba’s Future Hangs on the IPOs of Spawned Divisions
Having the behemoth list its smaller divisions could be the morale booster China’s economy needs.
The more the better?
Photographer: Qilai Shen/BloombergA six-way split of Alibaba Group Holding Ltd. means the value of China’s largest e-commerce player will be increasingly divorced from its actual operations, depending instead on equity-market assessments of the units it spins off. That would make the first few initial public offerings — when they happen — crucial to the conglomerate’s future.
Commencing April 1, each division has had an independent chief executive officer and has been responsible for its own performance. “The market is the best litmus test, and each business group and company can pursue independent fundraising and IPOs when they are ready,” Chairman Daniel Zhang told employees in a March email outlining the changes.