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Can MM see any positives from the Alibaba (BABA) breakup?

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Can MM see any positives from the Alibaba (BABA) breakup?

Hi James BABA recently announced a breakup of the various business units into separate entities in order to unlock the true value of the business. The downside is that the new entities will only be listed on the HK exchange which could be a negative. Does MM see this as a good move that could eventually lead to a re-rating? Many thanks Alex

Answer

Hi Alex,

Yes, we think it’s a good move. It’s very hard to value the components in the BABA business, which is huge. Separate entities create more transparency which is a good thing.

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Alibaba Group Holding Ltd (BABA US)
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