Alibaba shares fall as SoftBank reportedly sells most of its stake

By Mike Murphy

U.S.-traded shares of Alibaba Group Holding Ltd. sank Wednesday following a report that SoftBank Group Corp. has moved to sell most of its stake in the Chinese tech giant.

Citing an analysis of regulatory filings, the Financial Times reported Wednesday that Japan's SoftBank has sold about $7.2 billion in Alibaba shares this year through prepaid forward contracts, which will eventually lower its stake to just 3.8%.

Alibaba shares (9988.HK) fell nearly 6% during regular trading Wednesday, and slipped another 1% in after-hours trading.

SoftBank at one point had a 34% stake after Alibaba's U.S. IPO in 2014, and at its peak Alibaba accounted for about 60% of SoftBank's assets. At the end of 2019, SoftBank owned about 25% of Alibaba, at the time worth more than $100 billion, according to an SEC filing.

But Alibaba's valuation has plummeted in recent years, with shares currently trading around $94, after topping $300 in October 2020.

According to the FT, SoftBank is now selling its shares at a price comparable to when it bought them in 2014. SoftBank is looking to improve its financial situation after taking massive losses in its tech-company investments in recent years.

Last month, Alibaba announced it would split into six companies in an effort to "unlock shareholder value."

Alibaba's U.S.-traded shares are up 6.5% year to date and down 6% over the past 12 months. Tokyo-traded shares of SoftBank Group are down 8.3% in 2023 and down 10% over the past year.

-Mike Murphy

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04-13-23 0740ET

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