Shares of Alibaba (NYSE: BABA) were up in pre-market trading on Tuesday after the Chinese tech giant announced that it was going to undergo a major reorganization and will be split into six business groups with each of the groups having the ability to go public and raise funding from outside.
Each of the business groups will have its own CEO and Board of Directors and the move is designed to “unlock shareholder value and foster market competitiveness.”
The six groups include Cloud Intelligence Group, Taobao Tmall Commerce Group, Local Services Group, Cainiao Smart Logistics, Global Digital Commerce Group, and Digital Media and Entertainment Group. The exception to this reorganization is the Taobao Tmall Commerce Group, which will remain wholly owned by Alibaba.
This restructuring comes after Alibaba has struggled with growth over the past few quarters and the stock has lost more than 20% of its value in the past year.
Analysts are bullish about BABA stock with a Strong Buy consensus rating based on 15 unanimous Buys.