Topline
Shares of Chinese internet giant Alibaba plummeted on Thursday following a report Japanese tech investor SoftBank has sold almost all of its remaining stake, further paring a formerly lucrative and expansive partnership as the Chinese group explores a radical shakeup amid increasing government scrutiny.
Alibaba shares fell on Thursday after a report on SoftBank selling most of its stake.
Key Facts
SoftBank has sold around $7.2 billion worth of Alibaba shares this year via prepaid forward contracts, the Financial Times reported on Wednesday.
The sales, uncovered through an analysis of the Japanese tech investor’s regulatory filings, will reduce SoftBank’s stake in Alibaba from almost 15% to just 3.8%, the FT reported.
SoftBank declined to comment on the regulatory filings but told the FT the move reflects a broader shift to “a defensive mode” to account for uncertainties in the business environment.
Alibaba Group Holding’s shares in Hong Kong dropped by more than 5% on Thursday, erasing more than $10 billion of market value, recovering to a loss of around 2% during trading later that day.
Alibaba’s U.S.-listed stock was up around 1.7% in pre-market trading on Thursday morning.
Shares of SoftBank in Tokyo were down nearly 1% at market close on Thursday.
News Peg
SoftBank has been paring down its once sizable investment in Alibaba over recent years, a drawn out end to what many considered one of the tech world’s most lucrative investments ever. SoftBank is a titan in tech and previously held more than 30% of Alibaba, which was worth more than $200 billion at its peak. Last year, it lowered its stake from nearly 24% to less than 15%. The decision comes amid an increasingly tough business environment for tech companies in China, particularly with new regulation covering internet firms. Alibaba, which announced plans to spin off various arms of its business in March, has come under particular scrutiny after founder Jack Ma openly criticized state-owned banks.
Forbes Valuation
$21.7 billion. That’s how much Forbes estimates Masayoshi Son, who founded and leads SoftBank, is worth, according to our real-time wealth tracker.
Further Reading
SoftBank moves to sell down most of its Alibaba stake (Financial Times)
Source: https://www.forbes.com/sites/roberthart/2023/04/13/alibaba-shares-slump-after-softbank-reportedly-offloads-majority-stake/