Alibaba Group Holding Ltd (NYSE: BABA) is splitting into six separate businesses to unlock shareholder value. But Kingston Securities’ Dickie Wong says it’s not a strong enough reason to invest in this stock.
Why is he cautious on Alibaba stock?
Wong agrees that the tech titan is seeing signs of improvement on the earnings front. Last month, it reported financial results for its third quarter that topped expectations.
It is also noteworthy that activist investor Ryan Cohen recently revealed to have built a stake in the Chinese multinational as well (read more). Still, explaining why he’s not more onboard with buying Alibaba stock, Wong said:
Now probably is not the best timing. They split, they have different CEOs, they can separately list. This is something that may or may not happen. The bigger picture is, will Ant Group be reintroduced into the equity market?
Will Ant Group be listed any time soon?
Remember that Ant Group had to suspend plans of a $37 billion IPO in 2020 due to regulatory concerns.
In January, Alibaba announced a cooperation agreement with the government of Hangzhou. Today on CNBC’s “Street Signs Asia”, Wong noted:
In the longer term, they may introduce Ant Group to be listed probably in Hong Kong, may in the U.S. It may not be this quarter, may not be within this year, but eventually, they’ll introduce Ant again to the equity market.
His view is in contrast with Wall Street that currently has a consensus “buy” rating on Alibaba stock which has gained over 20% since March 20th.
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