BEIJING, November 17 (TMTPost)— Alibaba Group’s cofounder Jack Ma vowed to stay bullish on China’s internet behemoth as the tech typhoon is going to offload.

Credit：Visual China

Jack Ma is firmly bullish on Alibaba, and will also firmly hold its shares even though the company is currently highly undervalued as the stock price is far below its intrinsic value, the state-run newspaper Shanghai Securities News cited an announcement from Ma’s office on Friday. The announcement said Ma’s latest sales plan is a long-run planning, according to the newspaper.

The announcement came a day after Ma disclosed sales at a time Alibaba is resetting its strategy in face of increasing uncertainty owing to U.S. tech curbs.

JSP Investment and JC Properties, funds under Jack Ma’s family trust, plans to sell about 5 million American Depository Shares (ADSs) of Alibaba each, for a total of about $871 million, according to a filing with the U.S. Securities and Exchange Commission (SEC).

That is not Ma’s first offloading worth of multi-million dollars. Less than two years after Alibaba went public in the U.S., Ma announced that he would sell about 9.9 million shares of over a period of 12 months, accounting for a 5% stake in Alibaba, as he wanted to fulfill his commitment to charity donations and better manage personal wealth. In the past seven years, Jack Ma’s family trust and Joseph Tsai, another cofounder and Alibaba Chairman who took the role in September, trimmed their holdings several times.  

However, the latest sale came as the company that Jack Ma established more than two decades ago arrived at a crossroads when tech giants caught between escalating U.S.-China tensions.

Alibaba shares slump as much as 10% and settled about 9.1% lower Thursday after Jack Ma’s sales plan and the cloud business’ spinoff efforts scrapped were disclosed, even though the company reported a better-than-expected quarterly sales and its first-ever dividend payout.

In the quarter ended September 30, Alibaba posted revenue of RMB224.79 billion (US$30.8 billion) with a 9% year-over-year increase, beating the analysts’ projected RMB224.1 billion. The net income attributable to shareholders that quarter was RMB27.706 billion, missing the estimated RMB29.7 billion. The net income was RMB26.696 billion, compared to net loss of RMB224.67 billion in the same quarter last year.

In a report about the financial results for the third quarter, the company disclosed its board of directors approved an annual cash dividend for fiscal year 2023. It will issue the dividend in the amount of US$0.125 per ordinary share or US$1.00 per ADS, about US$2.5 billion in total, to holders as of the close of business on December 21, Hong Kong time and New York Time, respectively.

In the same report, Alibaba said it decided not to proceed with a full spinoff of Cloud Intelligence Group as the recent expansion U.S. export restrictions on advanced computing chips has created uncertainties for the unit’s prospects. The Hangzhou-based company believes the spinoff may not achieve the intended effect of shareholder value enhancement.

Alibaba warned the new export control “may materially and adversely affect” the cloud unit’s ability to offer products and services and to perform under existing contracts, thereby negatively affecting the company’s results of operations and financial condition. “These new restrictions may also affect our businesses more generally by limiting our ability to upgrade our technological capabilities,” the company said.

While dropping the spinoff plan for Cloud Intelligence Group, including cloud, AI, DingTalk and other businesses, Alibaba reiterated its commitment to AI. It said it will focus on "developing a sustainable growth model for the cloud unit under the fluid circumstances".

“Circumstances have changed”, so the company now focus on how to grow the cloud business, and a big part of it is “to provide cash to make investments, because in the AI-driven world, develop a full-blown business based on a very networked and highly scaled infrastructure, it requires investment,” Alibaba Chairman Joseph Tsai told analysts at an earnings call Thursday.

Tsai and Alibaba CEO Eddie Wu said the company needed a strategy “reset”. In his first public remarks as chief executive, Wu said the widening U.S. restrictions on chips export to China has forced his company to reconsider its breakup plan. 

Alibaba also disclosed the plan for initial public offering (IPO) of another arm-- Freshippo (Hema), a grocery stores operator under the China commerce segment, has been put on hold as it evaluates market conditions and other factors would contribute to a successful transaction to boost shareholder value.