Alibaba shares decline due to strict regulatory concerns

Alibaba shares decline due to strict regulatory concerns

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Alibaba (BABA) Group Holding Ltd., a Chinese e-commerce behemoth, saw its shares fall on Monday after falling on Friday in the United States. Following Didi Global Inc.’s decision to delist in the United States, investors were concerned about increased regulatory scrutiny in China.

Alibaba’s global consumer-facing and wholesale operations, including AliExpress, Alibaba.com, and Lazada, will now be housed under the new international digital commerce organisation. The domestic commerce firms will be housed under the China digital commerce section. 

In order to become more nimble and accelerate expansion, Alibaba announced the formation of two new entities to house its core e-commerce businesses: worldwide digital commerce and China digital commerce. In addition, on Friday, Didi revealed its intention to delist from the New York Stock Exchange and prepare for a Hong Kong listing. 

Alibaba Group Holding Ltd said that it would restructure its foreign and local e-commerce operations and hire a new chief financial officer. By ET 5:11 AM GMT, Alibaba’s Hong Kong shares had fallen 5.36 percent to $14.149. The Hong Kong-listed shares of China Evergrande fell 12.44 percent to HK$1.97. 

The adjustments, which were announced on Monday, come as Alibaba faces a number of challenges, including growing competition, a weakening economy, and regulatory scrutiny. The corporation has paid three 11th-hour coupon payments in the last few months.

The e-commerce behemoth’s Hong Kong-listed shares fell 8% in early morning trade, mirroring Friday’s losses in the US. Tighter regulatory scrutiny, a slowing economy, and more competition are all concerns for Alibaba, which prompted the firm to restructure its foreign and domestic e-commerce operations.

Alibaba’s global consumer-facing and wholesale operations will be housed under the international digital commerce section, which will comprise AliExpress, Alibaba.com, and Lazada. Jiang Fan, the former president of the Taobao and Tmall marketplaces, will lead the unit.

In a statement on Friday, the developer said that its creditors had requested $260 million and that it couldn’t guarantee adequate cash for coupon payback, prompting the Guangdong government to call chairman Hui Ka Yan to express its displeasure with the remark.

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