2023-04-13 01:33:07 ET
- SoftBank ( OTCPK:SFTBY ) is raising cash by selling the majority of its remaining shares in Chinese internet giant Alibaba ( NYSE: BABA ) amid a downturn in its technology investments and a move to limit its China exposure, the Financial Times reported on Wednesday citing regulatory filings it had analyzed.
- The move reflected its shift to "a defensive mode" to address a more uncertain business environment, and added the company would provide details of the deal in its quarterly results announcement in May.
- Alibaba shares fell as much as 5.2% in Hong Kong on Thursday, erasing about $13 billion of market value. SoftBank shares were little changed in Tokyo.
- The forward sales sent to the US Securities and Exchange Commission, will eventually cut SoftBank's stake in the Chinese e-commerce group to just 3.8% down from around a 14.6% stake the company said it was slated to hold as of end-September, according to the report.
- The Japanese group, led by billionaire founder Masayoshi Son, has sold about $7.2B worth of Alibaba shares this year through prepaid forward contracts, the report added.
- SoftBank booked a gain of $34 billion last year by cutting its stake in Alibaba to 14.6% from 23.7%, as the firm sought to shore up its cash reserves amid steep losses incurred by its Vision Fund unit .
- Earlier on Wednesday, Alibaba, Chinese tech stocks fall on Beijing's AI control proposals .
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Earlier this month, Alibaba jolted the tech sector by announcing plans to split into six units, each of which could pursue an IPO.
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For more on Alibaba's breakup, check out "Alibaba Drops a Bombshell" by Jonathan Weber, co-leader of SA investing group "Cash Flow Club."
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Related tickers: Alibaba ( BABA ), JD.com ( JD ), Tencent ( OTCPK:TCEHY ), Baidu ( BIDU ).
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More on Alibaba:
Chinese Internet agency unveils draft to regulate generative AI services
Alibaba unveils new ChatGPT-like service
Alibaba's $20B logistics unit reportedly eyeing 2023 Hong Kong IPO
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SoftBank sells most of its remaining Alibaba stake amid decline in its technology investment and limits its China exposure