Alibaba, one of the world's largest e-commerce companies, has announced plans to split its $250 billion empire into six separate business units, sparking speculation of several initial public offerings (IPOs). The move is the biggest shake-up in the company's history and will affect existing shareholders in different ways.
What it means for Existing Shareholders
If you're an existing shareholder, you might be wondering what will happen to your shares as a result of the splits. According to Alibaba, the company plans to allocate shares of the newly formed business units to existing shareholders. This means that if you own Alibaba stock, you will also own shares in the six new business units. The proportion of shares you receive in each new unit will depend on the number of Alibaba shares you own. Alibaba has not yet provided details on the exact allocation of shares to existing shareholders.
However, it's important to note that the value of your Alibaba shares may change as a result of the splits. The market will likely respond to the news of the splits and the potential for new IPOs, which could impact the value of Alibaba shares. It's difficult to predict exactly how the market will react, but it's possible that Alibaba's stock price could experience some volatility in the short term.
Short Term Trading Plan
Speaking of stock price, Alibaba's stock (BABA)$Alibaba(BABA)$
BABA's Day Chart
Based on technical analysis, BABA's relative strength index (RSI) on the day chart is currently at 66 and will likely go into the overbought region soon. The next resistance level is around 103, which suggests that if the stock is unable to stay above 103, it could experience a minor pullback. Therefore, I will consider purchasing Put Options at 103 or 104 expiring next week$BABA 20230331 103.0 PUT$ $BABA 20230331 104.0 PUT$ . However, I will make sure to keep my positions small and take profits quickly
Conclusion
In conclusion, Alibaba's plans to split into six business units and potentially launch several IPOs are exciting news for investors. However, it's important to be cautious and informed when making investment decisions. If you are an existing shareholder, you should expect to receive shares in the new business units, but be prepared for potential volatility in the stock price.
Is there a chance for a pullback? Let me know what you think in the comments below. Thank you for reading
Comments