Alibaba (NYSE:BABA) stock is in the news Monday as investors react to news of Daniel Zhang stepping down as the company’s cloud division leader.
Investors will note that Zhang’s departure from Alibaba comes alongside him giving up the chairman and CEO positions at the company. Taking over these roles are founder Jack Ma’s allies, Joseph Tsai and Eddie Wu.
Alibaba brought in the new executives as part of its restructuring plan that will see it split into multiple different companies. Experts were initially expecting Zhang to stick around as the leader of the company’s cloud division before today’s announcement.
Ronald Keung, a Goldman Sachs analyst, said the following about Zhang’s departure from Alibaba.
“The cloud business leadership change announcement may come as a surprise to the market. Investors will be focused on any further clarity/updates from the new management team on Alibaba Group’s latest organizational strategies and capital market plans of its respective subsidiaries.”
What This Means For BABA Stock
Some investors are likely viewing today’s departure news as the restructuring not going as well as planned. That comes with diminishing morale and confidence in the Chinese e-commerce giant. As such, it makes sense that shares of BABA stock are slipping lower today.
BABA stock is down 1.2% as of Monday morning with some 3.7 million shares traded. Its daily average trading volume is around 18 million shares.
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
