Alibaba Group Holding Ltd. (NYSE: BABA) shares recently went up by 5% after the e-commerce giant’s cofounder Jack Ma gave the company a vote of support. In a lengthy memo issued to Alibaba employees, Ma endorsed the company’s internal restructuring efforts and caused its share prices to surge.
The former Alibaba CEO has kept a low profile since he stepped down from Alibaba’s top position amid significant controversy; he has avoided media attention for the past several years. However, he made a relatively rare appearance to endorse the Chinese conglomerate a year after Alibaba embarked on the most significant shake-up in its entire history, breaking into six separate units.
Alibaba has seen a lot of volatility since Ma left his tenure, including the installation of a new chief executive officer as well as the announcement and subsequent abandonment of Alibaba’s cloud and logistics unit listings. Despite the conglomerate’s dominance within the online retail space, it has also lost ground to low-cost competitors such as Bytedance subsidiary Douyin and PDD Holdings.
Even so, Ma’s page-long post praised Alibaba’s current leaders CEO Eddie Wu and Chairman Joe Tsai, and spoke positively of their leadership. Ma also endorsed the decision to split Alibaba into six divisions and noted that it would make the company more flexible and consumer-focused by streamlining decision-making processes.
The embattled billionaire acknowledged that Alibaba’s history is littered with plenty of mistakes and said that the company should have the courage to admit its mistakes quickly, learn from them and make changes for the future. Even though the year has been fraught with many internal and external pressures and doubts for Alibaba, the billionaire added, he also “saw the birth of a strong and brave Alibaba team.”
Although Ma did not respond to requests for a comment on his post, a copy of the rare post was seen by Reuters and verified by a source that the original post on the e-commerce giant’s intranet.
According to WPIC Marketing + Technologies CEO Jacob Cooke, Ma’s letter was likely meant to restore “internal and external confidence” in the company’s current leadership because it has been subject to increasingly negative sentiment during the past several months. Alibaba’s shares have dropped by nearly 30% over the past year, bringing the online retailer’s valuation to around $178 billion. Alibaba competitor Rival PDD briefly surpassed Alibaba’s valuation in December, but the company is now close behind Alibaba at $160 billion.
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