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Alibaba Shares Held By SoftBank Will Be Nearly Sold Off: Financial Times

Alibaba Shares Held By SoftBank Will Be Nearly Sold Off: Financial Times
According to the Financial Times, which cited regulatory records it had examined, Japanese investment firm SoftBank Group Corp. has sought to sell almost all of its remaining shares in China's Alibaba Group Holding Ltd.
Following the release of the study, shares of Alibaba, one of the most valuable assets in SoftBank's portfolio, fell as much as 5.1% in Hong Kong before narrowing the loss to 3.3%. Shares of SoftBank were constant in price, following the general market.
The forward sales will eventually reduce SoftBank's ownership of the e-commerce company to only 3.8%, according to analysis by the British newspaper FT based on documents submitted to the U.S. Securities and Exchange Commission.
The Japanese group, led by billionaire founder Masayoshi Son, has sold about $7.2 billion worth of Alibaba shares this year through prepaid forward contracts, the newspaper said.
SoftBank has been seeking ways to monetise its stake in Alibaba, which the Japanese conglomerate bought into more than two decades ago with just $20 million spending.
SoftBank told FT the Alibaba transactions reflected its shift to "defensive mode" to address a more uncertain business environment, and said the company would provide details in its quarterly earnings results announcement in May.
Neither SoftBank nor Alibaba responded to Reuters' requests for comment. Alibaba's U.S.-listed shares dropped 1.3% in after-market trade.
By reducing its share in Alibaba from 23.7% to 14.6% last year, SoftBank earned $34 billion, helping the company shore up its financial reserves in the face of significant losses suffered by its Vision Fund.
Prepaid forward contracts, a kind of derivative contract that enables an investor to hedging risk related to an equity investment in a firm, were also used at the time.
As a result of escalating regulatory action in the technology sector, which included a sizable punishment on Alibaba and investigation of founder Jack Ma's business empire, Alibaba has lost more than two-thirds of its value from highs reached in late 2020.

Christopher J. Mitchell

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