Japan’s Softbank Group will reduce its stake by 3.8 percent by selling a large stake in Alibaba, China’s largest e-commerce company, the Financial Times reported on the 12th (local time). The main reason seems to be a drop in Alibaba’s stock price and Softbank’s performance defense. Chairman Son Masayoshi, who leads Softbank, is a long-time investor of Alibaba, and the sale of the stake is drawing attention given that Alibaba’s success played a major role in highlighting Son’s venture investment skills.
FT analyzed the documents of the U.S. Securities and Exchange Commission (SEC) and said Softbank sold about $7.2 billion worth of Alibaba shares this year. Softbank already sold about $29 billion worth of Alibaba shares last year. Alibaba’s stock price fell 5.9% on the New York Stock Exchange following the news.
Chairman Sohn and Softbank’s sale of Alibaba’s stake is drawing attention as both sides are set to change. Alibaba announced that it will split into six independent business groups: Cloud Intelligence Group, e-commerce, delivery platform, smart logistics, global digital business group, and digital media entertainment group, and Softbank will soon list its subsidiary British fabless (semiconductor designer) ARM on the New York Stock Exchange.
Japan’s SoftBank sells most of Alibaba’s stake
Softbank explained to FT that the sale was due to a defensive shift in its business strategy in consideration of the increasingly uncertain business environment. He added that the details will be disclosed at the quarterly earnings announcement next month. Softbank previously said it recorded a huge loss in its Vision Fund business last year.
The stock price crash due to Alibaba’s falling performance also affected the stake sale. FT said, “Softbank sold its shares at a similar price to when Alibaba was listed on the New York Stock Exchange eight years ago.” SoftBank has sold 398 million shares of Alibaba over the past 14 months at an average price of $92 per share. It is less than a third of the price compared to the stock’s high of $317. Alibaba’s stock price has plunged more than 70% since 2020 as the Chinese government launched a massive crackdown on the information technology (IT) industry, imposing huge fines on Alibaba and investigating Chairman Ma.
