Alibaba Group Holding is bringing back Joseph Tsai, who has become a prominent blockchain proponent and owner of the Brooklyn Nets since co-founding the Chinese e-commerce company, to help turn around the struggling technology giant.
Tsai, 59, will replace Daniel Zhang as chairman of the board. Eddie Wu, another Alibaba co-founder who currently is in charge of the Taobao and Tmall e-commerce businesses, will take over from Zhang as chief executive officer, while Zhang focuses on the company’s cloud intelligence offerings.
The Taiwan-born, US-educated Tsai is a longtime ally of fellow Alibaba co-founder Jack Ma. As the owner of a US sports empire, an investor in blockchain technology and a significant player in Manhattan commercial real estate, Tsai is well-known and liked on Wall Street, but his American ties are rare among Chinese business leaders.
Tsai in the chairman role is “exactly what an organization as big as Alibaba needs, and one that has international aspirations,” said Brian Wong, an early Alibaba employee and former special assistant to Ma, in an interview with Bloomberg TV. “He’s in a very good position, given his background and skills, to kind of play that role and really help bridge the company from China to the world, and vice versa, the world to China.”
Tsai moved to the US as a teenager to attend the Lawrenceville School, an elite private boarding school in New Jersey where he played lacrosse and American football. He then studied economics and East Asian Studies at Yale University where he received his undergraduate and law degrees. After graduating, he worked as a tax associate at the New York law firm Sullivan & Cromwell, and subsequently joined the buyout firm Rosecliff as general counsel. He later moved to Hong Kong as a private equity investment manager for Investor AB, the main investment vehicle for Sweden’s Wallenberg family.
Tsai understands Alibaba’s business intimately. The two were introduced through a friend and Tsai was right beside Ma at Alibaba’s inception in a Hangzhou lakeside apartment in 1999. Tsai initially worked for a salary of $50 a month, far from the $700,000 he was earning at Investor AB. Tsai later served as Alibaba’s chief financial officer until 2013 and became executive vice chairman that same year.
In the US, Tsai is arguably best known as the owner of the Brooklyn Nets. Tsai bought 49% of the NBA team in 2017 and purchased the remaining piece as well as the Barclays Center arena in 2019 for $3.5 billion. In addition, he owns the New York Liberty, a professional women’s basketball team and the San Diego Seals, a professional men’s lacrosse team. His purchase of the Seals in 2017 represented an expansion of the National Lacrosse League to San Diego. Tsai has also invested in the world of esports, acquiring a minority stake in the competitive gaming franchise G2 Esports in 2019.
Elevating Tsai to chairman puts a friendly face on crypto as he has been a longtime supporter of digital assets. Tsai tweeted “I like crypto” in late 2021 and has made several investments in the digital assets over the years. His family office, Blue Pool Capital, was among the backers of FTX, South China Morning Post reported, citing court filings. Blue Pool has also invested in Polygon, the platform supporting the digital token of the same name.
Bitcoin and other cryptocurrency activities are still largely illegal in China, but Hong Kong has recently begun wooing crypto companies as US regulators have cracked down on the industry after a series of high-profile collapses last year.
Analysts largely applauded the management changes, but Alibaba’s US-traded shares were down 4.7% mid-morning in New York as some argued that investors first want to see growth. Benchmark Co.’s Fawne Jiang and Long Lin wrote that they “believe that Joe’s takeover as the chairman should help to boost investors’ confidence.”
© 2023 Bloomberg
