U.S. shares of Alibaba Group Holding Ltd. dropped Tuesday following a surprise management shake-up, but one analyst views the development as a positive overall. Alibaba ADRs dropped as much as 5.2% to $87.32 in Tuesday trading. The Chinese e-commerce giant said Joseph Tsai would take over as chairman, and that Eddie Yongming Wu will become chief executive on Sept. 10. Benchmark analyst Fawne Jiang, who has a buy rating and a $180 price target on Alibaba, said that the separation of Chairman Daniel Zhang’s “role from Alibaba Group will enhance the independence” of Alibaba Cloud Intelligence Group (ACIG) from a business perspective as well as improve corporate governance. “His exclusive focus on ACIG comes in at a critical time as Alibaba Cloud gears to revamp its growth by leveraging and riding on the global ACIG development,” Jiang noted.
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