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Alibaba shares plunge amid Jack Ma’s $871M sale plan

Alibaba shares plunge amid Jack Ma's $871M sale plan
Elmaz Sabovic

Alibaba (NYSE: BABA) shares declined by 9% in Thursday’s session following the disclosure that Jack Ma’s family trust, the company’s founder, intends to sell 10 million US-listed shares. 

Additionally, Alibaba decided not to fully spin off its cloud business, citing recent US government-imposed chip restrictions. Consequently, the e-commerce firm’s premarket shares experienced a drop of over 9%.

BABA 24-hour stock price chart.  Source: Finbold
BABA 24-hour stock price chart. Source: Finbold

In new regulatory filings, it has been disclosed that Jack Ma’s family trust is preparing to sell 10 million American Depository Shares (ADS) of Alibaba Group for $871 million. The sale, conducted by JC Properties and JSP Investments, both funds affiliated with the family trust, is scheduled for November 21.

In response to this announcement, Alibaba’s US-listed shares experienced a -9.87% drop at the time of press on Thursday. This development coincided with the release of Alibaba’s latest quarterly report, which outlined particular challenges contributing to the company’s stock price decline.

Alibaba Releases Second Quarter Financial Results

In the fiscal Q2 2023 financial results, Alibaba disclosed a net income attributable to shareholders of 27.7 billion yuan ($3.8 billion) for the September quarter, falling short of the consensus projection of 29.7 billion yuan.

One notable aspect in the Q2 report was Alibaba’s decision to abandon the complete spin-off of its cloud unit, attributing the change to US chip export restrictions.

Initially intending to take its Cloud Intelligence Group public, the Chinese company reversed its decision due to the increased difficulty for China-based companies in securing essential chip supplies from the US amid recent restrictions.

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