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Uber Shares Fall After Reports Of Offloading 45 Million Shares By SoftBank

Uber Shares Fall After Reports Of Offloading 45 Million Shares By SoftBank
Following reports that the Japanese investment firm SoftBank, one of the major investors of the ride hailing company Uber, was set to sell off about one third of its stake in the country, the shares of the United States based tech startup dropped significantly.
Recent reports quoting sources with knowledge of the matter claimed that SoftBank will be selling off about $2bn worth of shares in Uber to make up for the its losses from its investment in the Chinese ride-hailing firm Didi and other investments.
The share price of Didi's has slumped since the Chinese firm made its debut in the US market less than a month ago primarily because of loss of investor confidence and concerns about in the future of the company following a series of actions taken against the company by Chinese authorities.
The sale of 45 million shares in Uber by SoftBank will leave the Japanese investment firm’s Vision Fund with about two third of its previous stake in the ride hailing company.
According to reports, a total of around $4bn on its stake in Chinese ride-hailing firm Didi is owned by the Japanese technology investment group.
However there were also reports that claimed that there was no relation between the decision of SoftBank to cut its stake in Uber to the large slump in the stocks of Didi and its market value and that the Japanese firm just felt that this was the right moment to take home some profits.
About $7.6bn were invested by SoftBank into Uber in 2018 while adding another $333m to that investment the following year. SoftBank is Didi's largest shareholder, with a stake of more than 20 per cent.
About 13 per cent stake in Didi is also owned by Uber after the US-based company sold its operations in China to its local rival five years ago.
With Chinese regulators tightening their grip on the domestic Chinese tech industry and home grown tech companies, in recent months there has been a significant fall in the market values of Chinese technology companies traded in the US, Hong Kong and mainland China.
For example, there has been an almost 40 per cent drop in the shares of Didi since it started trading on the New York Stock Exchange on 30 June. This was prompted by an order by the Chinese internet regulator just two days into Didi’s stock market debut in which app stores in China were ordered to stop offering the Didi app on their platforms over charges that the ride hailing company was collecting user data illegally.

Christopher J. Mitchell

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