Alibaba shares slide 4% after outgoing CEO quits cloud unit. Following the unexpected departure of departing Alibaba CEO Daniel Zhang from the company’s cloud computing unit on Monday, the shares of China’s Alibaba Group (9988. HK) saw a decline of more than 4% on the Hong Kong Stock Exchange.
The company disclosed Zhang’s decision to leave the firm in a letter to colleagues sent internally and reviewed by Reuters. On Sunday, Zhang was supposed to turn over the post of group CEO to Eddie Wu. Eddie Wu had been set to take over the role. According to the letter, Wu will also assume responsibility for the cloud business after Zhang has left the company.
As part of the ongoing reorganization at Alibaba Group, the business unit that serves as China’s primary cloud provider is scheduled to be separated from the parent company.
Alibaba said in the letter that Zhang would continue to contribute to the firm by “channeling his expertise differently.” Additionally, the company stated that it will spend one billion dollars on a technological fund that Zhang will create. In addition, Zhang was awarded the “emeritus” title, which is a first for Alibaba in its long history.
Analysts have estimated that the cloud division is valued between $41 billion and $60 billion. Still, they have also said that the vast amounts of data it manages might place it in the line of fire of regulators in the United States and other countries.
Alibaba’s share price reached its lowest point since August 23, dropping as much as 4.4% to HK$86.85.
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