Why am I πππbullish on $Alibaba(BABA)$ after the spilt πππ
My fellow investor, let me tell you why I am still bullish on Alibaba, even as its stock rises from $80 to $98. The reason is simple: Alibaba is splitting into six separate companies to unlock shareholder value.
ππππ π This move by Alibaba's management shows that they are committed to maximizing value for shareholders. By dividing the company into smaller entities, each one can focus on its core business and perform better over time. This could lead to higher revenues and profits for each entity, which could translate into higher stock prices for Alibaba shareholders.
Moreover, each new entity will be able to raise capital at its individual discretion, possibly including its own initial public offering (IPO). This means that Alibaba shareholders could benefit from the potential value creation of these new entities. However, it's important to note that the ownership structure could change for the other five as they seek investor funds, and shareholders will have to wait until IPO plans are drawn up to know how many IPO shares they could expect from these Alibaba businesses.
In addition, the timing of this announcement doesn't seem random to me. Just last month, China's government updated its policies for companies publicly listing overseas, and these rules go into effect on March 31. This could mean that Alibaba is looking to take advantage of these new rules by going public with some of its new entities.
In conclusion, the fact that Alibaba is splitting into six separate companies shows that management is focused on creating value for shareholders. While the specifics of how this will play out are still unclear, I believe that this move could lead to higher stock prices for Alibaba shareholders in the long term. So I remain bullish on Alibaba, even as its stock rises from $80 to $98 my target is $150
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