Alibaba Group Holding Ltd has made a strategic move by selling nearly $360 million worth of Bilibili Inc stock, signaling its shift towards investing more in artificial intelligence (AI) ventures and revamping its core business operations.
The e-commerce giant sold approximately 30.85 million Bilibili American depositary receipts at a price of $11.60 each, representing a 5.5% discount from Bilibili’s recent closing price. This move has caused a notable drop in Bilibili’s stock value.
Alibaba’s decision to divest from sectors like electric vehicles and AI is in line with its focus on strengthening its retail and technology ventures, particularly in cloud computing and AI. The company has also reduced its investments in companies such as XPeng Inc, SenseTime Group Inc, and GogoX Holdings Ltd while increasing funding for Chinese AI startups.
This strategic shift comes as Alibaba faces increasing competition from companies like PDD Holdings Inc and ByteDance Ltd. Despite being a crucial partner for Alibaba, Bilibili has encountered challenges in the mobile games and online commerce sectors, remaining unprofitable despite years of collaboration with Alibaba on content creation.
Co-founder Jack Ma’s decision to retain his stake in Alibaba, despite recent setbacks, reflects his confidence in the company’s potential. Ma’s move follows the company’s significant loss in market valuation due to the failed attempt to separate its cloud division.
Investors looking to gain exposure to Alibaba can consider options like the Global X Artificial Intelligence & Technology ETF and SPDR NYSE Technology ETF.
Alibaba’s stock is currently trading lower by 2.50% at $10.92 premarket on the last check Friday. Investors and industry watchers will be closely monitoring the company’s further steps as it continues to realign its focus to drive growth and innovation in the AI space.
