On November 16th, for Alibaba, a giant company, it was the most "crazy" 24-hour period so far, with over 220000 Alibaba people and countless shareholders staying up all night.
Jack Ma has initiated a reduction in holdings, announced quarterly financial results, suspended the Alibaba Cloud spin off, and temporarily suspended the listing of Hema. Under multiple changes, Alibaba, which spans multiple fields such as e-commerce, cloud computing, life services, and cultural entertainment, should this huge ship sail to where.
Ma Yun plans to reduce his holdings
It was an ordinary working day. Ma Yun was the first to lose the "Rocket", which aroused widespread concern in the capital market. On November 16th, Alibaba's financial report had not yet been released, and news of Jack Ma reducing his holdings in Alibaba's stock had swept through the air.
According to 144 documents disclosed on the official website of the Securities and Exchange Commission (SEC), Jack Ma's family trust JC Properties Limited (a British Virgin Islands company) and JSP Investment Limited (a British Virgin Islands company) plan to reduce their holdings of 5 million Alibaba founder shares on November 21, respectively, involving a total market value of $870.7 million (approximately RMB 6.4 billion).
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According to 144 documents, all of the Alibaba Group American Depositary Receipts held by Jack Ma Family Trust during this reduction were obtained on September 19, 2014. It is worth noting that this day is the time when Alibaba Group listed for trading on the New York Stock Exchange.
As the founder and core figure of Alibaba Group, Alibaba has no longer disclosed Jack Ma's shareholding in recent years. Public information shows that as of July 2, 2020, Jack Ma's shareholding has decreased to 4.8%, below 5%.
On the same day, Alibaba released its quarterly financial results as of September 30th. According to the financial report, Alibaba Group's revenue for the quarter was 224.79 billion yuan, a year-on-year increase of 9%, and its operating profit was 33.584 billion yuan, a year-on-year increase of 34%.
The capital market took the lead in responding to this. Before the market on November 17th, the stock price of Alibaba (BABA) experienced a significant decline, ultimately closing at $79.11 per share, a decrease of 9.14%. Overnight, the market value evaporated by nearly $202.74 (approximately RMB 146.839 billion) to $2014.76 billion.
Alibaba Cloud spin off and suspension
Along with the simultaneous announcement of the financial report, there were two quite sudden 'pullback' actions. Firstly, due to various uncertain factors, the complete separation of Cloud Intelligence Group will no longer be promoted; The second is the suspension of Hema Fresh's initial public offering plan.
Looking at the world, there is currently no cloud computing company with a huge volume like Alibaba Cloud that has gone public independently, so the outside world is paying special attention to its development path.
According to the financial report, the revenue of Cloud Intelligence Group during the reporting period was 27.648 billion yuan, an increase of 2% compared to the same period, and the growth rate significantly slowed down.
In response, Alibaba stated that facing the AI era, Alibaba Cloud needs long-term strategic investment more than ever. Alibaba will resolutely increase its investment in Alibaba Cloud, allowing it to focus on the "AI+cloud computing" development strategy without any distractions, and minimizing the adverse impact of uncertain factors on future development.
In fact, as early as March this year, Alibaba launched the largest organizational change in the history of "1+6+N", and all qualified business groups and companies will have the possibility of independent financing and listing. At that time, the list of the "first batch" of promising businesses for listing was quickly determined, with Cainiao, Alibaba Cloud, and Hema all on the list.
After eight months, the rumor of 'rookie birds flying first', Alibaba Cloud splitting up emergency brakes, and 'Hema IPO shelving' has finally settled and become a fact.
In addition, it is worth mentioning that under the continuous transformation of Alibaba's organizational structure, "reducing costs and improving efficiency" has become the keyword. It is understood that since the beginning of this year, Alibaba Cloud has been exposed to have started optimizing organizational positions and personnel, with an overall proportion of about 7%. Other sectors such as Taotian Group, Local Life, Cainiao, and Da Wen Yu are also facing layoffs.
According to the financial report, as of September 30, 2023, the total number of employees on Alibaba was 224955, a decrease of 3720 in the quarter. Industry insiders have analyzed that the golden age is gradually approaching, and the growth dividend is gradually disappearing. The fastest and most direct way to reduce costs is to reduce labor costs.
Far away from Ali
No matter how successful the past business model may have been, it is necessary to go back to scratch and awaken the mindset of starting a new business, "said Wu Yongming, CEO of Alibaba Group, in a financial report conference call." The world will undergo tremendous changes in the next decade, and huge uncertainty and opportunities will emerge at the same time. Alibaba is embarking on a new entrepreneurial journey and preparing to fully invest in technological change
At the financial report meeting, Wu Yongming comprehensively explained Alibaba's strategic plan for the new development stage for the first time, with "priority" being the most frequently mentioned keyword that night, Alibaba will sort out the strategic priorities of existing businesses, define core and non core businesses. For businesses that meet user needs and AI driven change trends, they will be prioritized as the first priority investment. For innovative products facing the future, they will adhere to long-term principles and firmly invest, with a three-year evaluation and testing cycle. "Wu Yongming said.
At the same time, the first batch of strategic innovation businesses of Alibaba were announced for the first time at the meeting, which were 1688, Xianyu, DingTalk, and Quark. Alibaba stated that these business organizations will operate as independent subsidiaries, breaking past positioning limitations within the group, and will continue to invest in them over a period of 3-5 years.
At this point, the development plan revealed by Alibaba has slowly begun. Industry insiders have analyzed that although the current profit level of these "four dragons" is limited, they may become a trump card in Alibaba's hands in the future.
From the financial report, Taotian Group's revenue for this quarter was 97.654 billion yuan, an increase of 4% compared to the same period last year. Alibaba stated that Taotian Group's core performance indicators continue to grow, with both user and merchant scales expanding simultaneously. 88VIP members have seen double-digit year-on-year growth, with a scale exceeding 30 million.
In addition, financial report data shows that as of September 30, 2023, the number of paid enterprise customers for DingTalk reached 100000, a year-on-year increase of about 40%. "DingTalk has gained unprecedented imagination due to the arrival of the AI era. Everyone and enterprises will have personalized intelligent assistants, and DingTalk is expected to become the best AI intelligent assistant platform." Wu Yongming publicly expressed his vision for its future.
In summary, it is currently unknown whether Alibaba, a massive ship, can successfully reach Shihe in the distance. However, it can be foreseen that there will be blue seas, blue skies, and rough seas along the way.
