SoftBank Group Corp. is moving to sell the majority of its stake in Chinese internet giant Alibaba Group Holding Ltd., the Financial Times reported, the latest sign of long-time China investors lowering their exposure there.
(Bloomberg) — SoftBank Group Corp. is moving to sell the majority of its stake in Chinese internet giant Alibaba Group Holding Ltd., the Financial Times reported, the latest sign of long-time China investors lowering their exposure there.
SoftBank has sold more than $7 billion in Alibaba shares this year through prepaid forward contracts, after selling $29 billion last year, according to the newspaper. The contracts give SoftBank the option to buy the shares back, but the group has settled previous deals by handing over the stock, the Financial Times reported.Â
SoftBank shares rose about 1% in Tokyo trading on Thursday. They had dropped about 8% this year through Wednesday’s close.
The sales will reduce the Japanese conglomerate’s ownership of Alibaba to less than 4%, the paper said, citing its analysis of regulatory filings. That’s down from around a 14.6% stake the company said it was slated to hold as of end-September. Softbank once owned about a third of the company through an early investment that had yielded thousands-fold returns.Â
Alibaba, along with other technology companies, has come under intense scrutiny from the Chinese government in recent years, and its shares have tumbled. Last month, the online commerce leader said it plans to split its $240 billion empire into six units that will individually raise funds and explore initial public offerings.Â
SoftBank, once one of Silicon Valley’s largest investors, has seen losses in recent years on other companies, too. It cut staff in its famous Vision Fund unit last year, amid a larger technology downturn, and it was an investor in failed crypto startup FTX.Â
This week, SoftBank said it plans to sell its early-stage venture capital arm SoftBank Ventures Asia Corp. after losing billions on startup investing. The company has said it will go on the defensive and instead focus on a planned listing of its chip design unit Arm Ltd. later this year.
Other long-time China investors have been lowering their exposure in China. Tencent Holdings Ltd. plunged this week on signs that its largest shareholder Prosus NV may extend the selling of the Chinese tech firm’s stock.
Over the past 14 months, SoftBank brought in an average of $92 a share from the forward sales of 389 million Alibaba shares, the Financial Times said. That value is much less than the company’s all-time high of $317 a share, it said.
SoftBank did not immediately respond to a request for comment.Â
(Updates with SoftBank share trading)
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