Despite the sell-off, Alibaba reported an 8.5% increase in quarterly sales to about $31 billion. The company now plans to grow its cloud business organically and announced its first-ever annual dividend of $2.5 billion to appease shareholders. Jack Ma, the company's founder and former chairman, remains optimistic about the company's future.
Key takeaways:
- Alibaba has lost $26 billion in market cap after shelving plans to spin off its cloud business, causing the stock to drop more than 9% on Thursday and continue its slide on Friday.
- The company's executives cited the need for a strategy "reset" and pointed to US restrictions on chip sales to China as a reason for the decision.
- Alibaba also plans to suspend its listing for its grocery arm, Freshippo, due to a weakening consumer sector in China.
- Despite the stock sell-off, Alibaba reported solid quarterly earnings with an 8.5% increase in sales to about $31 billion, slightly above consensus expectations.