Advisers
Learn
Newsletter
Offers
Podcast
About
  Back
~
1
min read
· Posted on
February 21, 2024

Despite a slow start to 2023, Alibaba announces its first unit to go public. And it's Cloud + AI obviously...

Alibaba announced the first company to be publicly listed - the Cloud division.

What's the key learning?

  • Alibaba's new spin off is the Cloud division business that includes both cloud infrastructure and AI... a business that generated $2.7 billion in revenue during the first quarter.
  • A strategic spin-off from a company can unlock significantly greater value for shareholders.
  • With the current demand for cloud computing and AI right now, the standalone value of this AI/Cloud company is likely to be a lot more than when it's bundled within the behemoth.

👉 Background: Despite the big break up in late March, the Alibaba Group got off to a slow start to this year. In fact, Alibaba Group revenue only rose 2% for the first quarter of the year.

👉 What happened: But the big news is that Alibaba announced the first company to be publicly listed - the Cloud division. That's the business that includes both cloud infrastructure and AI. It will be spun off and listed publicly later this year.

👉 What else: The cloud business generated $2.7 billion in revenue during the first quarter so it is likely to be quite an attractive company when it stands on its own two feet.

What's the key learning?

💡A strategic spin-off from a company can unlock significantly greater value for shareholders. Especially if it's being 'under appreciated' within the broader business.

💡With the current demand for cloud computing and AI right now, the standalone value of this AI/Cloud company is likely to be a lot more than when it's bundled within the behemoth.

💡And this is just the first step in Alibaba's grand plan. Alibaba's Chair called the six units "little Alibabas". And the plan is to help all of these "little Alibabas" to become another "big Alibaba" as big as the group company is right now. Watch out!

Ready to win at money?

Sign up for Flux and join 100,000 members of the Flux family

Sign Up
A button to App StoreGoogle Play store button
Excellent  4.9 out of 5
Star rating
© 2024 Flux Technologies Pty Ltd and Flux Media Pty Ltd
All rights reserved.
Explore
HomeLearnPodcastAboutNewsletterFlux at WorkAdvisers
Offers
Home LoansSavings AccountsBank AccountsShare TradingCar LoansCredit Cards
Support
CareersContact usPrivacy PolicyTerms of Use
Disclaimer: Flux Technologies Pty Ltd (ABN 86 634 507 172) is an authorised representative (Representative No. 1283166) of Mozo Pty Ltd who is the holder of AFSL No. 328141. We also provide general advice on credit products under our own Australian Credit Licence No. 530103. The product information presented does not constitute an offer and we are not recommending or suggesting any particular product. Any product advice presented is of a general nature only, and is not to be taken as any sort of advice as it has not taken into account your personal circumstances, objectives, financial situation or needs. Flux may not cover all products available to you. Check out our Credit Guide and Financial Services Guide for more information.

All information contained in the Flux app, www.flux.finance, www.joinflux.com, app.flux.finance and any podcast of Flux Media Pty Ltd (ABN 27 639 804 345) is for education and entertainment purposes only. It is not intended as a substitute for professional financial, legal or tax advice. Flux Media Pty Ltd is the owner of the registered trade mark, 'What the Flux'. While we do our best to provide accurate information on the podcast, we accept no responsibility for any inaccuracies that may be communicated.
No items found.