Shares of Alibaba Group experienced a decline on Monday following the announcement that former CEO Daniel Zhang would be stepping down as the head of the company’s cloud business.
Zhang was initially set to step down as CEO on Sunday, allowing him to focus on the cloud unit. However, his successor as CEO, Eddie Wu, will now also be overseeing the cloud business. Notably, the cloud unit is China’s largest provider of cloud computing services and is expected to be spun off as Alibaba separates into six distinct parts.
Both Reuters and the South China Morning Post reported Zhang’s departure on Sunday, referring to an internal memo from the company. Despite this news, Alibaba has yet to comment on the matter in response to requests for clarification.
Consequently, Alibaba’s Hong Kong-listed shares (ticker: 9988.HK) fell by 2.7% on Monday. Simultaneously, its American depositary receipts experienced a 0.7% decline during pre-market trading.
Back in June, Alibaba had announced that Zhang would be stepping down as CEO to lead the cloud unit as part of the company’s restructuring. Zhang initially became Alibaba CEO in 2015 and later took on the chairman role in 2019.
Importantly, Alibaba has reaffirmed its commitment to executing the plan for spinning off the Alibaba Cloud Intelligence Group. As part of this initiative, the company has pledged to invest $1 billion into a technology group led by Zhang.
