- Alibaba has canceled the planned spinoff of its cloud computing division.
- The Chinese e-commerce giant said new U.S. export restrictions on semiconductors and equipment created “uncertainties.”
- Alibaba also announced its first-ever annual dividend.
Alibaba Group Holdings' (BABA) American depositary receipts (ADRs) fell more than 9% in early trading Thursday as the Chinese e-commerce giant announced it was canceling its proposed spinoff of its cloud computing unit. , and profits were lower than expected.
Alibaba said that It had halted a move to spin off its Cloud Intelligence Group into a separate company due to recent restrictions imposed by the Biden administration on US exports of chips and advanced computing equipment to China.
Alibaba explained export limits “has created uncertainties” for the division, and its spin-off “may not produce the desired effect of improving shareholder value.”
The company also reported its September quarterly results, and earnings per share (EPS) of 1.95 Chinese yuan ($0.27) missed estimates. Revenue rose 9 percent from last year to 224.79 million yuan ($30.81 million), beating forecasts.
Alibaba also announced that It would spend $2.5 billion on its first annual dividend, giving investors $1 per ADR and $0.125 per common share. Payment would be made at the close of business on December 21.
With Thursday's losses, Alibaba's ADRs are down more than 13% year-to-date.
Do you have a tip for Investopedia Journalists? Please email us at email@example.com