Alibaba Drops After Daniel Zhang, The Cloud Unit CEO, Quits Unexpectedly

On Monday in Hong Kong trade, shares of Alibaba Group dropped after the e-commerce behemoth said that Daniel Zhang, the outgoing chief executive, would also step down as its cloud units head.

In a statement released on the Hong Kong Stock Exchange, Alibaba said Eddie Yongming Wu would, effective immediately, take over as CEO of the firm and also as acting chairman and CEO of the cloud unit.

After the announcement, Alibaba shares slumped more than 3%. This dragged the wider Hang Seng index 2% lower. Markets did not expect the move as Zhang was due to lead Alibaba‘s cloud unit after the company’s 6-way split in the next few months.

On Monday the company said that it would continue with spinning off the cloud unit with a separate management team as planned. The e-commerce firm had also indicated the unit may potentially be listed.

Earlier this year Alibaba announced that Zhang would step down as CEO as part of its plan to split its core businesses into 6 new entities. Zhang would originally have led the cloud unit after the split.

Joining Alibaba in 2007, Zhang played a crucial role in the companys hugely successful “Singles Day” shopping event.