Alibaba Abandons Cloud Unit Spin-Off, Shares Plunge

The decision, attributed to U.S. tech export restrictions, wipes $20 billion off Alibaba's market value as the company refocuses on 'strategic innovations'.

Alibaba Group has abandoned plans to spin off its cloud computing unit due to U.S. tech export restrictions, causing a near 10% drop in its shares and wiping $20 billion off its market value.
The company is now focusing on 'strategic innovations' at four of its businesses: 1688, Xianyu, DingTalk, and Quark, which will operate as independent subsidiaries.
The surprise announcement came as regulatory filings revealed that trusts of Alibaba founder Jack Ma plan to sell almost $900 million worth of Alibaba shares.
Alibaba's cloud unit, which was expected to become fully independent, generated 12% of the company's revenue last quarter.
The company's fintech affiliate, Ant Group, saw a 65% drop in profit last quarter compared to a year ago, following a nearly $1 billion fine from Chinese regulators.