SoftBank aims to sell majority of its stake in Alibaba, FT says.
SoftBank has sold more than $7 billion in Alibaba shares this year through prepaid forward contracts, after selling $29 billion last year, according to the newspaper. The contracts give SoftBank the option to buy the shares back, but the group has settled previous deals by handing over the stock, the Financial Times reported.
The sales will reduce the Japanese conglomerate’s ownership of Alibaba to less than 4%, the paper said, citing its analysis of regulatory filings. SoftBank once owned about a third of the company, an investment that performed spectacularly well — until it didn’t.
This week, SoftBank said it plans to sell its early-stage venture capital arm SoftBank Ventures Asia Corp. after losing billions on startup investing.
Over the past 14 months, SoftBank brought in an average of $92 a share from the forward sales of 389 million Alibaba shares, the Financial Times said. That value is much less than the company’s all-time high of $317 a share, it said.
Comment(2)
$Alibaba (BABA.US)$ remains a sturdy investment despite $SOFTBANK GROUP CO (SFTBY.US)$ selling $7.2 billion in share value. The Chinese e-commerce giant has a dominant position in the growing Chinese market, and its cloud computing business and digital payments platform are seeing increased demand. Although SoftBank's sale may have caused some short-term market volatility, long-term investors should continue to see Alibaba as a valuable and resilient investment opportunity. THE INFORMATION BEING PRESENTED IS NOT FINANCIAL ADVICE AND SHOULD NOT BE USED AS SUCH. MAKE WISE DECISIONS OR SEEK ADVISE FROM A PROFESSIONAL BEFORE MAKING ANY INVESTMENTS.
The investment performed spectacularly well by any measure. My recollection is they only paid $25M for the original position.
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