Alibaba up 12% as it plans to break up its business ➗
Divide and conquer: Alibaba, aka the Amazon of China, is splitting its business into individual ‘units’. E-commerce, cloud services, logistics and other divisions will all become their own businesses, in a bid to bolster a falling share price.
Investor confidence is up: Alibaba is becoming a holding group, and that means having a new corporate structure where it becomes more diversified by controlling numerous sub companies. Each sub company will be able to IPO separately.
Regulatory concerns: Alibaba has suffered a difficult past two years, contending with a record $2.8bn fine by Beijing regulators for monopolistic behaviour. By breaking itself up into smaller companies, it should pose less of a threat. Could this be a fresh start?
Lyft gains 6% on CEO step-down 🚖
Change of the guard: Lyft, Uber’s main rival, is overhauling its management. Co-founders Logan Green (CEO) and John Zimmer (President) are moving into non-executive roles on the board amid fierce competition in the ride-hailing market. Shares of Lyft lost nearly ¾ of their value in 2022 and are down about 13% this year. Uber has gained 24%.
Super new CEO: Lyft’s new CEO, David Risher, has an impressive resume of helping lead Amazon's growth from a small online bookshop to a major retailer, getting shareholders excited about Lyft's future outlook
A potential sale is on the cards: Uber dominated sales in 2022, accounting for ¾ of ride-share sales at the end of December. With Lyft continuing to be marginalised, it seems selling the company may be in everyone’s best interest, including shareholders.
Intra-Cellular surges 17% after promising drug results 💊
Potential drug breakthrough: Pharma company Intra-Cellular focuses on therapies to treat central nervous system disorders. On Tuesday, it released positive results for its depression therapy, Caplyta.
Reduction in symptoms: Caplyta is the company’s leading drug, and it has performed well on patients with depression, bipolar and schizophrenia in a phase 3 trial. On the MADRS, (a scale for assessing the severity of depressive symptoms), patients saw a 5.7-point reduction with depressive disorders. This is big news in the pharmaceutical world.
FDA approval: Caplyta is already FDA approved, which is great news as the overall process can take around 10 years. With 3 more drugs in the pipeline seeking approval, investors seem confident the company will be in strong demand.
What have we learnt this week? 🤓
Holding groups can excite investors: If there are two things investors love, it’s diversification and IPOs. When a company becomes a holding group, it can offer both these advantages.
Investor confidence continues to be a major market mover: Lyft’s new CEO has a proven track record at both Amazon and Microsoft. When the market prices this in, we see a change in stock price.
Medical breakthroughs are a win-win-win: Patients receive better treatment, the medical company can continue to grow, and investors are rewarded.
*Figures correct as of March 29th 2023.
Past performance does not guarantee future results. Capital at risk when investing.
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