Last year, Alibaba clarified the strategic center and priorities of the group, and making resolute choices around its main business was not just a statement.
Alibaba's reduction of holdings in Xiaopeng Motors has been confirmed, and on March 20th, a subsidiary of Alibaba once again reduced its holdings, with a reduction amount of approximately $310 million. On March 22nd, Alibaba also responded to rumors of selling Bilibili ADRs, stating that "this sale is mainly based on Alibaba's own capital management goals," which means that reducing holdings is only a matter of time.
New energy vehicle elimination race begins, Alibaba reduces its holdings in Xiaopeng Motors
On March 20th, Alibaba subsidiary Taobao China Holdings Limited sold 33 million shares of Xiaopeng Motors American Depositary Shares (ADS) with a total value of approximately $314 million. The transaction price ranged from $9.6 to $9.75 per share, lower than the market price.
According to the financial report of Xiaopeng Motors, before the reduction, Taobao China Holdings Co., Ltd. held 192 million shares of the company, accounting for 11.09%, making it the second largest shareholder of the company. After the reduction, Xiaopeng Motors stated that Alibaba remained the second largest shareholder of Xiaopeng Motors thereafter.
Regarding the reduction of holdings, the relevant person in charge of Alibaba Group stated, "We will sell some of our shares in Xiaopeng based on our own capital management goals, and our shareholding will be reduced from 10.2% to 7.5%."
On March 22, the Hong Kong stock market of Xiaopeng Motors plummeted, closing at HKD 34.55 at noon, down 8.84%.
Reducing holdings in Xiaopeng Motors at this time is not only related to Alibaba's major strategy of returning to its main business, but also to the industry trend. Prior to this, the "stock god" Buffett reduced his holdings in BYD, Wang Xing reduced his holdings in Ideal Automobile, and Dahua Group reduced their holdings in Zero Run Automobile, which means that early investors in electric vehicles have already begun to cash out. More importantly, the competition in the electric vehicle industry is still on the rise, while Xiaomi Group is about to release its cars. At the beginning of this year, major manufacturers are still engaged in a price war.
After releasing the 2023 financial report, He Xiaopeng, Chairman of Xiaopeng Motors, said, "Since the first quarter, the price war in the industry has become increasingly fierce, with a number of companies being eliminated and well-known technology companies ceasing investment in car manufacturing. This marks the official start of the elimination race for smart electric vehicles from 2024 to 2027."
Bilibili and other platforms are also included in the reduction package, and the goal of "slimming down" is unshakable
In addition to reducing its holdings in Xiaopeng Motors, there are market reports that Alibaba will sell the Bilibili ADR, with an expected price of $11.60 per ADR and a potential realization of $357.8 million.
According to public information, in February 2019, Alibaba purchased 13.6 million ordinary shares and 10 million ADS shares of Bilibili through Taobao China, accounting for approximately 8% of Bilibili's total share capital.
On March 22, Alibaba officials responded with almost the same language as reducing their holdings in Xiaopeng Motors: "This sale is mainly based on Alibaba's own capital management goals." However, he mentioned that reducing holdings will not affect the cooperation between the two sides in business, and Alibaba's related businesses will continue to strengthen cooperation with Bilibili in various fields.
At the business level, Alibaba has indeed had a lot of interaction with Bilibili recently. In order to promote the commercialization process, Bilibili has chosen an open-source strategy in its e-commerce business, directing traffic towards e-commerce platforms to help UP owners and platforms monetize. Under this strategy, Bilibili connects its product library with top e-commerce platforms such as Alibaba, JD.com, and Pinduoduo through jump links, advertising spaces, and other forms, and conducts more targeted and in-depth cooperation.
Recently, a small advertisement card for Li Jiaqi's "Fashion Festival" live broadcast room appeared on the homepage of Bilibili's mobile app. Clicking on it will directly redirect Bilibili to Li Jiaqi's live broadcast room on Taobao. At the bottom of the live broadcast room page, there will be a "New Time Limited Subsidy" product for Bilibili users, and they can receive new customer red envelopes.
However, due to this impact, the Hong Kong stock market on Bilibili continued to plummet 8.36% this morning to HKD 87.7.
When Alibaba released its financial report for the first three quarters of the 2024 fiscal year in February this year, it was mentioned that within the nine months of that fiscal year, Alibaba had completed the exit of $1.7 billion in non core assets, and was also looking at how to exit listed stocks. It even established a dedicated team, and from the current process, the efficiency is still very high.
Previously, there have been rumors of sales from Ele.me, RT Mart, and Hema. Although these rumors have been refuted, it seems that under the leadership of Wu Yongming, doing "subtraction" has been seen as a crucial step in revitalizing Taotian's core business highlights. In addition, a wave of Alibaba veterans have also appeared in a younger management team, and local life, Hema, and other businesses have been replaced with "post-80s" management roles. However, whether this series of operations can help Taotian's core business return to its peak still needs time to be tested.
