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SoftBank is selling the majority of its stake in Alibaba, what does it mean for the tech giant?
Softbank Group is moving to sell the majority of its stake in Alibaba. According to the Financial Times, the Japanese conglomerate has sold over $7 billion in Alibaba shares this year through prepaid forward contracts, following $29 billion sold last year. These sales will reduce SoftBank's ownership of Alibaba to less than 4%, from its previous one-third ownership.
This news has prompted many to speculate on the potential impact on Alibaba's stock price and future prospects. While the sales may have initially led to a 4.7% drop in Alibaba's shares in Hong Kong, some investors believe that SoftBank's move could ultimately benefit Alibaba by reducing the perception of over-dependence on a single investor. ![]()
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However, others remain concerned about the long-term impact on Alibaba's growth and strategy. Last month, the company announced its plan to split its $220 billion empire into six units, which will individually raise funds and explore initial public offerings.(Read more) SoftBank's sale of its stake in Alibaba may limit the company's ability to invest in these new ventures and potentially hinder its growth.
Moreover, SoftBank's recent losses in other companies, including the failed crypto startup FTX, have also raised concerns among investors. The sale of its early-stage venture capital arm, SoftBank Ventures Asia, has further added to the uncertainty surrounding the company's future strategy.
Over the past 14 months, SoftBank brought in an average of US$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 US$317 a share, it said.
As the tech industry closely watches the fallout from SoftBank's sale of its stake in Alibaba, it remains to be seen what the long-term implications will be for both companies.
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MonkeyGee : I think softbank might have some banking issue and needs money that is why they are selling everything they have under the sun
Kuries OP MonkeyGee : that make sense
Cloud D Investor : I agreed that with SoftBank holding about 3.8% of Alibaba's shares, Alibaba's shares will be less volatile and more stable diring this geo political tension.