Alibaba Group Holding Ltd. shares surged the most intraday since September as the company named a new chief executive officer, nine months after a record initial public offering.
China’s biggest e-commerce operator posted a 45 percent increase in revenue.

Daniel Zhang will become CEO on May 10, replacing Jonathan Lu, who will remain on the board as vice chairman, the company said Thursday. The change was announced as Alibaba’s sales rose to 17.4 billion yuan ($2.8 billion) in the three months ended in March, beating analysts’ estimates.
Zhang hopes to build a global platform beyond China, part of a strategy that is “a long journey,” he said in an interview Thursday on Bloomberg Television.

Alibaba’s market value had plunged as much as $90 billion from a November peak amid concern about slowing economic growth and criticism from the Chinese government about its business practices. Billionaire Chairman Jack Ma elevated Zhang after the chief operating officer helped turn the Nov. 11 “Singles’ Day” shopping promotion into the company’s biggest sales day.

“Perhaps Jack is sending a signal to the capital markets and the regulator that he’s willing to make changes,” said Mike Clendenin, managing director of RedTech Advisors.

Eoin Treacy's view

Alibaba’s honeymoon period is over. Investors are now focusing on the success of its business model in delivering on the promise of international domination. One of the issues it faces with competing internationally is the long shipping times required to move goods from China to the end customer. Solving this challenge requires a great deal of investment in logistics and local warehousing within target markets. As a result progress is slow. 

Cementing the company’s position as China’s largest online market place against interlopers such as JD.com, Dang Dang and VIPShop is probably more of a priority at present and may have influenced the elevation of Daniel Zhang from Taobao. 

The share has found support in the region of $80 on a number of occasions and today’s bounce is another example. Potential for additional higher to lateral ranging can be given the benefit of the doubt provided it holds this week’s lows on the next pullback.   

While it has nothing to do with China, Yelp has also been a serial underperformer within the new tech sector but bounced today on speculation the company is pursuing a sale.