Chinese e-commerce giant Alibaba Group (NYSE:BABA) announced CEO succession plans in a surprise move this morning. Current Chairman and CEO Daniel Zhang will be succeeded by Eddie Wu, effective September 10, 2023. Wu is one of the co-founders of the group and also chairs the group’s e-commerce platforms, Taobao and Tmall Groups. At the same time, Joseph C. Tsai will take over the role of the group’s Chairman. The unexpected succession plans might be influenced by Co-founder Jack Ma’s rare appearance at a company event, the Global Mathematics Competition, on Saturday, June 17.
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Meanwhile, Zhang will lead and give his full attention to Alibaba Cloud Intelligence Group, the unit that BABA is trying to spin off into an independent listed company. The succession changes come months after Alibaba announced a major reorganization plan (1+6+N model) that involved splitting into six business groups, with each of the groups having the ability to go public and raise funding from outside. Both Wu and Tsai will work closely with Zhang to ensure a the smooth transition of roles while focusing on the successful unveiling of the planned restructuring.
Commenting on the changes, incoming CEO Wu said, “While our current transformation brings a new corporate organizational and governance structure, Alibaba’s mission remains unchanged. We will continue to enable individuals and businesses to benefit from the digital economy and serve our customers with unique value proposition supported by innovation and our leading technology.”
Is BABA a Buy, Hold, or Sell?
With 15 unanimous Buy ratings, BABA stock commands a Strong Buy consensus rating on TipRanks. Also, the average Alibaba Group price forecast of $144 implies 56.4% upside potential from current levels. Meanwhile, BABA stock has gained 7.2% in the past six months.
