SoftBank aims to sell majority of its stake in Alibaba, FT says

San Francisco – SoftBank Group is moving to sell the majority of its stake in Chinese Internet giant Alibaba Group Holding, the Financial Times reported on Wednesday.

The news sent Alibaba shares plunging as much as 5.2 per cent on Thursday before paring losses to 2.4 per cent at midday.

Alibaba was the biggest drag on the Hang Seng benchmark, which fell 0.5 per cent.

SoftBank has sold more than US$7 billion (S$9.3 billion) in Alibaba shares in 2023 through pre-paid forward contracts, after selling US$29 billion in 2022 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, FT reported.

The sales will reduce the Japanese conglomerate’s ownership of Alibaba to less than 4 per cent, the paper said, citing its analysis of regulatory filings. SoftBank once owned about a third of the company, an investment that performed spectacularly well – until it did not.

Alibaba has come under intense scrutiny from the Chinese government in recent years, and its stock price has tumbled. In March, the online commerce leader said it planned to split its US$220 billion empire into six units that will individually raise funds and explore initial public offerings.

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 in 2022 amid a larger technology downturn, and it was an investor in

failed crypto start-up FTX.

This week, SoftBank said it plans to sell its early-stage venture capital arm, SoftBank Ventures Asia, after

losing billions on start-up investing.

Over the past 14 months, SoftBank has brought in an average of US$92 a share from the forward sales of 389 million Alibaba shares, FT said.

This value is much less than the company’s all-time high of US$317 a share, it said. SoftBank did not immediately respond to a request for comment. BLOOMBERG