Investing.com — Hong Kong stocks of e-commerce giant alibaba Group (NYSE:) soared on Wednesday after Chinese media reported that Jack Ma endorsed the company's current leadership in an internal memo.
Alibaba (Hong Kong:) rose 5.4% to HK$74.25, its highest in almost a month. The stocks that pushed up stock prices the most rose 2%, hitting the highest price in about a month.
According to Chinese media reports, Mr. Ma posted a memo on Alibaba's internal network on Wednesday praising the turnaround efforts of CEO Eddie Wu and Chairman Joseph Tsai.
The memo marks one year since the e-commerce giant outlined plans to embark on a major restructuring of its core business. Although the company has scrapped plans to split its core division into six companies, it has made a number of changes over the past year to shore up sales amid weak Chinese consumer demand and capitalize on growing interest in artificial intelligence. Measures were announced.
The company also reshuffled its leadership team to sharpen its focus on the cloud division, which is central to Alibaba's AI ambitions.
Alibaba on Tuesday cut prices on its cloud products for the third time in the past 12 months, aiming to capitalize on growing demand for computing power from the AI industry.
But the cloud division has suffered from weak sales for the past two years as rising interest rates have curtailed investment in technology. The company also faces headwinds from U.S. restrictions on exports of advanced semiconductor technology to China, which are critical to China's AI ambitions.
Alibaba's restructuring was also undertaken to appease Chinese regulators, who have led a nearly three-year campaign against the company over antitrust violations.
On the e-commerce front, Alibaba is still suffering from sluggish sales in China due to increased competition and sluggish consumer spending as the Chinese economy slows.
