No. of Recommendations: 2
I agree, it does not make a big difference if the cloud division is spun off or not. More important, it does not grow.
I don't know what made Mr. Market selling BABA today, perhaps it is the perception that a growth stock should not pay a dividend? It can be seen as an admission that there is not much future growth left (apart from the international unit, which seems to do great).
However, BABA looks very cheap. Don't forget the 1/3 share of ANT, which is probably worth 25bn$.
Thanks for your comments. The cloud devision is in a lull in growth, with only 2%, IIRC. But, heck, I'd say it's amazing they are growing at all with all the economic problems China is facing, combined with the restrictions the US has put on their operations and products.
I think the restrictions will slow them down some, but it won't be too long before China's chip industry catches up, I bet, or at minimum it will improve rapidly going forward. And even if there's a lull in domestic growth now, I expect massive future growth of Chinese cloud services.
There is a lot of upside for Alibaba. I'm glad to get a 1.3% dividend and there have been tons of great growth companies over the years that have paid a dividend, i.e. Walmart, Coke, etc ... It's a good kind of problem to have: to have so much cash you can't re-invest it all, even while you attack a giant growth market opportunity with truly enormous investment.
