Stumbling giant
Trying for a turnaround at Alibaba
Good morning, e-commerce experts. This is your Stock Market Rundown for April 17th, 2024. Thanks for reading. Let’s get started:
TODAY’S TOP STORY: TURNAROUND FOR A CHINESE TECH TITAN
Chinese e-commerce giant Alibaba has a lot of fingers in a lot of pies—it operates in food delivery, cloud computing, live streaming, and physical supermarkets.
But despite the diversity, in recent years Alibaba has been struggling. In fact, if it were a delivery package, Alibaba would be damaged, dented, and possibly stolen from your porch.
Its share of Chinese e-commerce declined from 80% to 40% over the past decade. And it hasn’t helped that Alibaba’s founder, former English teacher Jack Ma, has been AWOL.
Ever since a spat with Chinese regulators in 2020, he’s been a near-recluse. Aside from rumoured sightings of him in Spain, Thailand and Australia, he was incommunicado with the business world.
But recently, financial media was abuzz as Ma popped up to give a pep talk to employees, in the form of an internal company memo (which, of course, immediately got leaked). In the memo, Ma praised the current leadership’s reorganization efforts, and saluted “the birth of a strong and courageous Alibaba team.”
It’s just the latest signal that Alibaba is going into offensive mode. The company has stepped up share buybacks, and is slashing prices on its cloud services to woo developers. It’s also selling off assets to raise cash to invest in AI.
In the biggest vote of confidence of all, Ma has been buying millions worth of stock. If things work out, it just might the special delivery shareholders have been waiting for.
SO WHAT ELSE IS GOING ON?
The CEO of Chevron got a 12% raise last year, while employee pay at the oil company dropped on average. Happy for him that he can afford to put premium gas in his yacht.
The World Trade Organization is predicting that, after a sluggish 2023, global trade will rebound in 2024. My son Jaden just ordered a new gaming chair and ring light off Amazon… maybe his streaming career will boost the economy.
GM’s problem-plagued robotaxi unit plans to resume testing of its vehicles, but with human drivers. Will they also have manual windows and 8-track players?
Amazon has been hit by a class-action lawsuit accusing the retailer of steering customers towards products that pay Amazon more fees. It’s like if Tinder only showed you potential dates who were unemployed and hoping for a free meal.
That’s me signing off today. Let's meet again tomorrow morning for more of the same. Yours in capitalism, The Axe
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