SoftBank Group Shares Rise Sharply After Alibaba Stock Jumps on Reorganization Plan

By Kosaku Narioka

SoftBank Group Corp. shares rose sharply Wednesday morning after Alibaba Group Holding Ltd.'s reorganization plan led to a surge in the stock of the Chinese e-commerce giant in which the Japanese company is a major shareholder.

SoftBank Group shares were recently 5.3% higher at 5,147 yen ($39.33) after rising as much as 6.5% earlier.

Alibaba said late Tuesday that it plans to split itself into six independently run companies that could seek separate initial public offerings. Alibaba's American depositary receipts surged 14% in New York overnight.

SoftBank Group reduced its stake in Alibaba last year to preserve cash as it rides out a severe tech downturn. The Japanese tech investment company still held a 13.5% stake in the Chinese company as of the end of December, down from 23.7% as of end-June.

Alibaba's reorganization came after Chinese authorities in recent months signaled they were winding down a sweeping regulatory clampdown aimed at reining in the country's powerful tech sector.

SoftBank Group shares fell sharply earlier this month as the failure of Silicon Valley Bank cast a shadow over the growth prospects of tech companies already hit by interest-rate increases from the U.S. and other central banks.

SoftBank Group's tech funds business lost billions of dollars in the quarter ended December.

Write to Kosaku Narioka at kosaku.narioka@wsj.com

(END) Dow Jones Newswires

March 28, 2023 22:49 ET (02:49 GMT)

Copyright (c) 2023 Dow Jones & Company, Inc.