This article first appeared on GuruFocus.
Alibaba Group (BABA, Financials) is going to make its semiconductor division, T Head, public. The corporation aims to restructure the unit so that employees can buy shares. This is a common way to align incentives before a listing.
There isn’t a specific schedule or valuation yet, but investors reacted fast to the news. Alibaba’s shares in the U.S. rose 4.6% in premarket trade.T Head, which started in 2018, makes processors for AI, cloud computing, and connected products. As global supply problems continue, Alibaba’s operation has become a vital aspect of the company’s larger push to bolster China’s local semiconductor ecosystem.An IPO might help Alibaba bring attention to one of its fastest-growing tech groups and get money to help it come up with new ideas. For now, the markets will be keeping an eye out for further information while the corporation plans its next big move.