SoftBank sells most of its remaining Alibaba stake amid decline in its technology investment, limits its China exposure
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- SoftBank (OTCPK:SFTBY) is raising cash by selling the majority of its remaining shares in Chinese internet giant Alibaba (NYSE:BABA) amid a downturn in its technology investments and a move to limit its China exposure, the Financial Times reported on Wednesday citing regulatory filings it had analyzed.
- The move reflected its shift to "a defensive mode" to address a more uncertain business environment, and added the company would provide details of the deal in its quarterly results announcement in May.
- Alibaba shares fell as much as 5.2% in Hong Kong on Thursday, erasing about $13 billion of market value. SoftBank shares were little changed in Tokyo.
- The forward sales sent to the US Securities and Exchange Commission, will eventually cut SoftBank's stake in the Chinese e-commerce group to just 3.8% down from around a 14.6% stake the company said it was slated to hold as of end-September, according to the report.
- The Japanese group, led by billionaire founder Masayoshi Son, has sold about $7.2B worth of Alibaba shares this year through prepaid forward contracts, the report added.
- SoftBank booked a gain of $34 billion last year by cutting its stake in Alibaba to 14.6% from 23.7%, as the firm sought to shore up its cash reserves amid steep losses incurred by its Vision Fund unit.
- Earlier on Wednesday, Alibaba, Chinese tech stocks fall on Beijing's AI control proposals.
Earlier this month, Alibaba jolted the tech sector by announcing plans to split into six units, each of which could pursue an IPO.
For more on Alibaba's breakup, check out "Alibaba Drops a Bombshell" by Jonathan Weber, co-leader of SA investing group "Cash Flow Club."
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This was corrected on 04/13/2023 at 1:49 AM. The revised post removes related tickers and adds more related news link on SoftBank/Arm: