Shares of Chinese e-commerce behemoth, Alibaba, took a significant hit on Thursday, dropping by more than 8%. The plunge came in the wake of the company’s announcement that it would cancel the spinoff of its cloud computing arm due to US restrictions on exports of advanced chips.

The Announcement

Alibaba had initially planned to split the group into six distinct entities, with the intention of taking them public. However, the company’s shares were down eight percent following the announcement of the cancellation of the spinoff.

The Impact

The impact of this setback was immediately felt in the stock market, with Alibaba’s shares plummeting. Investors reacted to the news with concern, leading to a sell-off that resulted in the 8% drop in the company’s share price.

The Future

The future of Alibaba’s cloud computing arm is now uncertain. The US export curbs on advanced chips have thrown a wrench, and it remains to be seen how the company will navigate this challenge.

Insiders View

In conclusion, the cancellation of the spinoff of Alibaba’s cloud computing arm has had a significant impact on the company’s stock price. The situation highlights the challenges that tech companies face in the current geopolitical climate. It also underscores the importance of diversification in a company’s business model to mitigate risks. As the situation unfolds, investors and market watchers will be keeping a close eye on Alibaba’s next moves.