Alibaba slides after its chairman announces he'll step down in a year (BABA)

pulse 13:06 - 10 September 2018

Alibaba shares dropped after the company announced that Chairman Jack Ma will step down in a year, with CEO Daniel Zhang succeeding him. Jefferies analysts said the 12-month time frame would enable a smooth transition with lower “key-man risk” following Ma's reduced role.

Alibaba
CEO Daniel Zhang will succeed Ma, who will remain a permanent member of the Alibaba Partnership after retirement.
Jefferies analysts said the 12-month timeframe would enable a smooth transition with lower "key-man risk" following Ma's reduced role in Alibaba.
Watch Alibaba trade in real-time here.

Shares of Alibaba dropped 1.7% Monday ahead of the opening bell after the Chinese e-commerce giant

Karen Chan, an analyst at Jefferies, said the transition was arranged in a way that would reduce the risk of Alibaba failing without Ma.

"We believe the 12-month time frame would enable a smooth transition with lower 'key-man risk' following the reduced role of Jack Ma in Alibaba’s VIE enhancement as discussed in its latest 2020 fiscal year," said Chan in a note sent out to clients on Monday.

"We believe by retaining a permanent role in Alibaba Partnership, Jack Ma will maintain an influential role in the company."