Alibaba Is Preparing for a Breakup. Amazon and Alphabet Should Think About Doing The Same.

Mar 29, 2023

Alibaba Is Preparing for a Breakup. Amazon and Alphabet Should Think About Doing The Same.

Alibaba Group Holding’s stock is rising due to the company’s drastic restructuring. The proposal and the stock’s reaction may interest Amazon.com and Alphabet, Google’s parent company.

The Chinese internet business introduced a new organizational structure on Tuesday. The corporation has divided itself into six business segments, each with its board of directors and CEO. Cloud intelligence, online shopping, mapping, transactions, logistics, and digital media, including Alibaba Pictures, are among the six.

“Each business group will also have the flexibility to raise outside capital and potentially to seek its own IPO, with the exception of Taobao Tmall Business Group, which will remain wholly owned by Alibaba Group,” reads the news release. 

Investors like the idea that Alibaba is preparing for a divorce. In the afternoon, Alibaba’s American depositary receipts (BABA) were up 14%, while the S&P 500 and Nasdaq Composite were down 0.5% and 0.8%, respectively.

The increase on Tuesday adds around $30 billion to the stock market’s valuation.

It was just what the stock needed. Alibaba shares were down approximately 25% year to date and roughly 25% year to date as of Tuesday’s trade. Shares were trading around ten times the per-share earnings predicted for the calendar year, but in previous years, the company had traded at over 20 times the expected profit for the next year.

The stock of Amazon (AMZN) might benefit from a similar shot in the arm. Shares are up around 16% this year but down nearly 42% from this time last year. Shares are trading at roughly 56 times expected 2023 earnings, compared to a recent average of about 70 times forward earnings.

Amazon’s and Alibaba’s companies are very similar. Amazon Web Services, a leading provider of cloud computing services and a movie studio, logistical assets, internet retail, internet advertising, and third-party retail services, are all present.

Alibaba “gives a boost and positive signal to other big tech companies that they can also explore and consider the breakup of their segments to create value,” said Jim Osman, founder of The Edge Research. The Edge specializes in corporate spinoffs and corporate transactions. 

“If done successfully, Alibaba would stand as a great example for the conglomerates on value creation,” he claimed. 

According to Osman, in the event of a split, Amazon Web Services and the rest of Amazon may be worth around $200 in a couple of years. Amazon stock is presently trading a little under $100 per share, down over 50% from it’s all-time high of around $189 in the summer of 2021.

Osman’s list of likely split prospects also includes Google (GOOGL). Because of its dominance in the advertising business, it is subject to ongoing antitrust examination, according to Osman. He believes the business should explore spinning up YouTube first to create value for shareholders while avoiding excessive antitrust scrutiny.

Amazon and Alphabet shares didn’t get a boost from Alibaba. Amazon shares were down 1.2% in afternoon trading, and Alphabet shares were down about 1.6%.

Taken together, the price swings indicate that while the market is happy about Alibaba’s reorganization, investors believe that its actions alone may not be enough to make Amazon and Alphabet’s management think about something more radical to create shareholder value. Nevertheless, both companies should weigh that option.

Neither company responded to a request for comment.

Alphabet stock is up about 14% year-over-year but has fallen about 29% in the past 12 months. The stock was down about 32% from its record high of $151 in February 2022.

Subscribe Our Newsletter

Brace_Yourself_The_iPhone_

Milena

Brace Yourself, the iPhone Christmas Shortage is Coming

According to Apple, customers may have to wait longer to obtain their new iPhone 14 Pro and iPhone 14 Pro Max because of lower shipments. Even during the Holiday season.

Companies
BioNTech, Pfizer Vaccine Neutralises Omicron With Three Shots
BioNTech, Pfizer Vaccine Neutralises Omicron With Three Shots

BioNTech and Pfizer stated on Wednesday that a three-shot course of their COVID-19 vaccine was able to neutralize the new Omicron type, and that an improved vaccination may be delivered in March 2022 if required.

Companies
Get the ultimate solution: B2BinPay Get the ultimate solution: B2BinPay
Sponsored
Constantine

What is WAGMI and NGMI? Understanding Crypto Slangs
Dive into the meaning and impact of WAGMI and NGMI in crypto culture. Learn how these phrases shape optimism, caution, and collaboration in digital communities.

discover
Forex Broker Marketing Strategies That Work in 2022.

Alexander

Forex Broker Marketing Strategies That Work in 2022

Nowadays, we can observe an increasing number of Forex brokerage firms striving to become the best in providing their unique services to traders. As a result, the rivalry to engage traders increases as more brokers become involved in Forex trading.

Forex Business
Contact us bg

Contact Us

Contact the Liquidity Provider
for any questions and advertising inquiries

    Please fill out this contact form to get in touch with us

    / 3000

    By clicking “Get in touch” button, you agree to the privacy policy

    Successful!
    Thank you for your request.
    We will contact you shortly.
    Close

    Alexander

    What Is an Interest Coverage Ratio? How to Use This Financial Metric to Evaluate Company Health

    Interest Coverage Ratio Explained

    Hazem

    After-Hours Trading: Can You Trade After Financial Markets Close?

    After-Hours Trading Explained

    Alexander

    How to Scale a Crypto Exchange Business and Stay Competitive

    how to scale crypto exchange business

    Constantine

    Crypto CrypticStreet Review: The Future of DeFi and Secure Crypto Trading

    Crypto CrypticStreet Review: The Future of DeFi and Secure Crypto Trading

    Alexander

    Bitcoin Power Law Explained: How It Shapes BTC’s Long-Term Growth

    Bitcoin Power Law Explained: How It Shapes BTC’s Long-Term Growth

    Hazem

    Megaphone Pattern​: What Is It? How to Use It In Trading

    Megaphone Pattern​: How to Read & Trade with It

    Constantine

    Top 5 Liquidity Bridge Providers in DeFi

    Top 5 Liquidity Bridge Providers in DeFi

    Hazem

    Max Funded IUL Explained: Is It a Legitimate Financial Strategy?

    Understanding Max Funded IUL

    Alexander

    Tax Refund Timeline: When Will You Get Your Tax Return?

    how long does it take for tax refund

    Constantine

    Crypto Liquidity — What is it, and How to Measure It?

    What is Crypto Liquidity and How to Measure It?

    Constantine

    AI in Finance: A Game-Changing Trend Shaping the Industry

    AI in Finance

    Hazem

    5 Ways to Make Money with ChatGPT and Build Your Wealth

    Make Money with ChatGPT

    Constantine

    Top AI Companies to Invest in April 2025

    Top AI Companies to Invest in March 2025

    DeepSeek vs ChatGPT: Which AI Technology is Better For You?

    DeepSeek vs ChatGPT: Feature-by-Feature AI Tool Comparison

    Constantine

    Top Solana Meme Coins in 2025: Best Presales and Where to Buy

    Solana Meme Coins 2025

    Alexander

    How Renewable Energy Stocks Can Supercharge Your Portfolio

    How Renewable Energy Stocks Supercharge Your Portfolio

    SEC Crypto Regulations: What Financial Advisors Need to Know

    SEC Crypto Regulations: Insights for Financial Advisors

    Hazem

    The Cup and Handle Pattern – How Trade Using This Bullish Indicator?

    Cup and Handle Pattern – How to Predict Price Breakouts?

    Hazem

    Year-Over-Year (YoY): What It Means? How It’s Used in Finance?

    Year-Over-Year (YoY): How to Calculate Business Performance?

    Constantine

    What is WAGMI and NGMI? Understanding Crypto Slangs

    WAGMI vs. NGMI

    Alexander

    Litecoin Mining Guide: How to Get Started in 2025?

    Litecoin Mining Guide: How to Get Started in 2025?

    Constantine

    What is Thruster (THRUST): An Advanced AMM for the Blast Ecosystem

    Thruster (THRUST): How Does it Revolutionise DeFi?

    Constantine

    How Does Polymarket Work? Detailed Guide

    How Does Polymarket Work? Comprehensive Guide

    Constantine

    Coinbase vs. Сoinbase Pro: Which Platform is Right for You?

    Coinbase vs. Coinbase Pro
    liquidity-provider-logo
    • News
      • Stock Market Forecast
      • Stocks
      • Banks and Finance
      • Companies
      • Crypto
      • Forex
      • AI
      • Technology
      • DeFi
      • NFT
    • Articles
      • Crypto Payments
      • Trading
      • Crypto Exchange Business
      • Forex Business
      • Fintech
      • Liquidity
      • FinTech Awards
      • Blockchain
      • Investing
      • NFT
      • DeFi
    • More
      • Videos
      • Liquidity Providers List
      • Crypto Payment Providers
      • White Label Brokerage Platforms
      • Broker CRM Platforms
    [email protected]

    © 2024 Liquidity Provider. All Rights Reserved

    Privacy Policy Cookie Policy
    This site is registered on wpml.org as a development site. Switch to a production site key to remove this banner.