Alibaba’s faded rally signals grim outlook as restoring it will be a battle

It took only four weeks for optimism around Alibaba Group Holding Ltd.’s breakup plan to fizzle. Restoring it will likely be an uphill battle.

Alibaba’s American Depositary Receipts are now 2.3% below where they were before the e-commerce firm announced its overhaul plan in late March, wiping out as much as 20% in gains. Investors had originally hoped that a split into six units would boost the empire’s value and increase chances of listing those units publicly, reversing woes faced after the sudden halt of Ant Group’s initial public offering in 2020 amid Beijing’s concerns about influence.