Softbank is looking to sell nearly all of its remaining stake in Alibaba Group in a bid to take a more “defensive” position in a more uncertain business environment, as per FT. Softbank has divested about $7.2bn worth of Alibaba shares since the start of the year through prepaid forward contracts and are on track to reducing its stake in the Chinese company to just 3.8%. Last year, SoftBank booked a profit of $34bn by cutting its stake in Alibaba to 14.6% from 23.7%. In August 2022. Softbank had raised as much as $22bn in cash by selling more than half of its holdings in Alibaba Group through similar prepaid forward contracts. The move by SoftBank comes at an important time where several of its investments have performed poorly with large losses. At one point in time, it owned as much as 34% of Alibaba. Following the report, Alibaba’s shares plunged as much as 5.1% in Hong Kong and 1.3% in the US.
Softbank’s bonds have remained largely unmoved. Alibaba’s 2.7% 2041s are currently trading lower by 0.3 points at 67 cents on the dollar, yielding 5.67%.
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