Alibaba Stock Falls On Reports CEO No Longer To Run Cloud Unit
Shares of Chinese technology giant Alibaba (BABA) are down 3% in Asian trading on news that outgoing chief executive officer (CEO) Daniel Zhang will no longer transition to become chairman of the company's cloud computing business as originally planned.
The change comes after Alibaba said in June of this year that Zhang was departing as chairman and CEO of Alibaba Group to concentrate on the cloud computing unit.
Eddie Wu, who is taking over from Zhang as CEO of Alibaba, will now also be chairman of the cloud business on an interim basis, the company said in a written statement.
In a surprise move, Alibaba announced in June that Zhang was resigning as both CEO and chairman of the company effective on September 10 to foon cloud computing.
Zhang had served as Alibaba's CEO since 2015 and succeeded company founder Jack Ma in the top role.
This spring, Alibaba announced plans to split into six business groups, paving the way for each unit to eventually go public on its own, including the cloud computing division.
Alibaba has struggled in recent years with slowing economic growth in its home market of China and increased regulatory oversight from officials in Beijing.
The stock of Alibaba has declined 5% over the last 12 months to trade at $90.05 U.S. per share.
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