What's Going On With Alibaba Stock Tuesday?

Jack Ma's co-founded Chinese e-commerce giant Alibaba Group Holding Limited (NYSE: BABA) is undergoing significant challenges. 

Ma's internal blog post last year emphasized the need for change and reform at Alibaba, highlighting the company's loss of direction. 

Once Asia's most valuable company, Alibaba was overtaken in market capitalization by rival PDD Holdings Inc (NASDAQ: PDD) in November, with its shares now 75% off their peak three years ago. 

This decline follows a series of regulatory issues, strategic U-turns, and declining staff morale, the Financial Times reports.

Also Read: E-Commerce Battle Heats Up: Alibaba and JD.com Adopt 'Refund Only' Policies to Compete with Pinduoduo

A person close to Alibaba's management noted the wake-up call from PDD's overtaking, leading to a strategic rethink, FT writes. 

Eddie Yongming Wu recently took over as CEO, replacing Trudy Dai, to consolidate control over Alibaba's diverse businesses.

Insiders and analysts point to Alibaba's struggles against new competitors, its lag in AI advancements, and the failure to leverage its domestic e-commerce dominance in Western markets. 

The company attempted a significant restructuring to stimulate growth, announcing the split into six units in March. 

However, fading investor optimism and other challenges led to the abandonment of plans to spin off its cloud business and pause the listing of its supermarket unit, with uncertainty surrounding the other four.

Internal power struggles and confusion have plagued the company, exemplified by resistance to centralizing IT infrastructure and the sudden departure of former CEO Daniel Zhang. 

Alibaba also faces competition in e-commerce from ByteDance's Douyin and PDD's Pinduoduo and Temu. 

The company's attempts at issuing dividends and share buybacks have sent mixed signals about its growth strategy.

Alibaba's future remains uncertain, including its fintech affiliate Ant and its logistics arm Cainiao's IPO. Experts believe that a radical approach is needed for Alibaba to regain its leading position in the e-commerce sector.

Price Action: BABA shares traded lower by 2.01% at $75.95 premarket on the last check Monday.

Also Read: Regulatory Clampdown and Strategic Shifts at Alibaba: A Year of Challenges and Transformation

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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