Japanese technology investor SoftBank Group Corp has moved to sell almost all of its remaining shares in Alibaba Group Holding Ltd, the Financial Times reported, sending the Chinese e-commerce major’s stock tumbling.
The sale would come as valuations of China’s big tech firms have started recovering this year after an end to two years of heightened regulatory scrutiny, providing a window for long-time investors such as SoftBank to reduce exposure to an economy battered by strict pandemic policies and Sino-US tension.
SoftBank’s share price closed down 1% on Thursday, versus a 0.3% rise in the broader market. Alibaba, one of the most valuable assets in SoftBank’s portfolio, tumbled as much as 5.2% in Hong Kong after the report before paring the loss to 2%.
SoftBank has been seeking ways to monetise its stake in Alibaba, which the Japanese conglomerate bought into more than two decades ago with just $20 million spending. “They have been clear that ... they need to monetise profitable holdings,” Jon Withaar, Head of Asia special situations at Pictet Asset Management, said of SoftBank.
Alibaba’s US-listed stock fell 1.3% in after-market trade on Wednesday.
SoftBank aims to list British chip designer Arm this year in an initial public offering (IPO) that would raise at least $8 billion, people familiar with the deal told Reuters last month.
On Wednesday, the FT said forward sales based on filings at the US Securities and Exchange Commission showed SoftBank’s Alibaba stake would eventually fall to 3.8% from almost 15%.
Published in The Express Tribune, April 14th, 2023.
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