Alibaba Falls on Unexpected CEO Change

Alibaba (BABA:US) stock fell as much as 4.5% on Tuesday after the Chinese tech titan said that its CEO Daniel Zhang will step down to focus on the company’s cloud business.

Joe Tsai, Executive Vice Chairman of Alibaba and owner of the NBA franchise Brooklyn Nets, will become the new CEO. On the other hand, Zhang will start leading the Alibaba Cloud Intelligence Group, starting from September 10.

“As everyone is well aware, the development of core technologies such as cloud computing, big data and AI will lead to a tremendous transformation of our society and is of utmost strategic significance,” Zhang said in an internal memo to Alibaba staff, according to CNBC.

“Cloud Intelligence Group is now full speed ahead on its spin-off plans and we are approaching a crucial stage of the process, so it is the right time for me to dedicate my full attention and time to the business,” he added.

The change comes after Alibaba announced plans to spin off its cloud division as a separate, publicly traded company.

Shares are trading just around 4.40% lower year-to-date despite a massive rally in tech stocks in 2023.

Senator John Hickenlooper disclosed recently that he sold some BABA shares in April. The transaction was made on April 28 when the BABA stock closed at $84.69.

Alibaba shares were seen trading around the $88 handle on Tuesday.