Hong Kong-listed Alibaba shares dropped nearly 6% on Thursday after the Financial Times reported the Japanese investment giant SoftBank sold billions worth of BABA shares recently.
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According to Financial Times calculations, SoftBank generated ~$7.2 billion by selling shares of the Chinese internet titan. Following the latest sale, SoftBank holds a 3.8% stake in Alibaba, worth ~$9.44 billion based on BABA’s yesterday closing price of US$93.84.
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It means that SoftBank divested approximately 85% of its stake in Alibaba over the last 3 years. In 2020, SoftBank reported a nearly 25% stake in Alibaba worth more than $100 billion, which was easily its biggest investment at the time.
SoftBank’s initial investment in Alibaba made in 2000 was just $20 million. Alibaba founder Jack Ma exited SoftBank’s board in June 2020 after the Covid-inflicted selloff resulted in massive losses for the Japan-based investment giant.
While SoftBank reported strong profits for 2021, the inflation-triggered selloff in tech stocks ultimately created huge financial losses for SoftBank. In February, its flagship Vision Fund reported a pretax loss of around $5 billion.
Alibaba shares have struggled to rally this year (+6.5% YTD) despite the announced strategic transformation that will see the company split into 6 independent business units. BABA stock staged a one-day rally last month in response to the news as the move was “designed to unlock shareholder value and foster market competitiveness.”
The 6 new business units – Cloud Intelligence Group, Taobao Tmall Commerce Group, Local Services Group, Cainiao Smart Logistics, Global Digital Commerce Group, and Digital Media and Entertainment Group – will be focused on Alibaba’s strategic priorities.
“This transformation will empower all our businesses to become more agile, enhance decision-making, and enable faster responses to market changes,” CEO Daniel Zhang said in a statement.
Zhang will continue heading the Cloud Intelligence Group, which covers the company’s cloud and artificial intelligence activities.
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