SoftBank sells majority of its stake in Alibaba, causing 3% drop in company’s shares

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Alibaba shares dropped nearly 3% in after-hours trading after regulatory files revealed that SoftBank has sold a majority of its stake in the company.

According to a Financial Times analysis of corporate filings published on Wednesday, SoftBank sold approximately $7.2 billion in shares in the Chinese ecommerce giant through prepaid forward contracts. Because of the sales, SoftBank will now own only 3.8% of Alibaba, which has a market capitalization of nearly $250 billion.

Only about three years ago, SoftBank held a nearly 25% stake in the tech behemoth valued at more than $100 billion. SoftBank’s most valuable investment at the time was Alibaba.

But, over the years, SoftBank and its Vision Fund have suffered massive quarterly losses as the tech sector has slowed, lowering valuations. The Vision Fund reported a pretax loss of 660 billion Japanese yen (approximately $5 billion) in February, marking the unit’s fourth consecutive quarterly loss.

SoftBank’s founder and CEO, Masayoshi Son, stated at the time that the Japanese technology conglomerate and holding company would operate in a “defence” mode and be more “conservative.”

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SoftBank sells majority of its stake in Alibaba, causing 3% drop in company’s shares

Alibaba shares dropped nearly 3% in after-hours trading after regulatory files revealed that SoftBank has sold a majority of its stake in the company.

According to a Financial Times analysis of corporate filings published on Wednesday, SoftBank sold approximately $7.2 billion in shares in the Chinese ecommerce giant through prepaid forward contracts. Because of the sales, SoftBank will now own only 3.8% of Alibaba, which has a market capitalization of nearly $250 billion.

Only about three years ago, SoftBank held a nearly 25% stake in the tech behemoth valued at more than $100 billion. SoftBank’s most valuable investment at the time was Alibaba.

But, over the years, SoftBank and its Vision Fund have suffered massive quarterly losses as the tech sector has slowed, lowering valuations. The Vision Fund reported a pretax loss of 660 billion Japanese yen (approximately $5 billion) in February, marking the unit’s fourth consecutive quarterly loss.

SoftBank’s founder and CEO, Masayoshi Son, stated at the time that the Japanese technology conglomerate and holding company would operate in a “defence” mode and be more “conservative.”

Disclaimer

We strive to uphold the highest ethical standards in all of our reporting and coverage. We StartupNews.fyi want to be transparent with our readers about any potential conflicts of interest that may arise in our work. It’s possible that some of the investors we feature may have connections to other businesses, including competitors or companies we write about. However, we want to assure our readers that this will not have any impact on the integrity or impartiality of our reporting. We are committed to delivering accurate, unbiased news and information to our audience, and we will continue to uphold our ethics and principles in all of our work. Thank you for your trust and support.

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