Alibaba Group Holding Ltd (阿里巴巴) registered 1 billion American depositary shares (ADS) that had not been registered before, suggesting Softbank Group Corp might intend to sell part of its stake.
Japan’s Softbank backed Alibaba before its initial public offering (IPO,) so a large portion of its holdings in the company are not registered as ADS, Citigroup Inc analysts, including Alicia Yap, wrote in a note.
Softbank owns 5.39 billion ordinary shares of Alibaba, equivalent to 673.76 million ADS, or a 24.8 percent stake, according to Citi’s calculations.
Alibaba’s Hong Kong shares fell as much as 5.7 percent, leading declines in the Hang Seng Index.
Softbank’s stock rose as much as 5.4 percent in Tokyo.
Masayoshi Son’s Softbank has been under pressure in recent months, as the value of many portfolio companies have slid with the technology downturn. Softbank’s shares have tumbled about 50 percent from their peak last year, with the decline in the value of holdings, including Didi Global Inc (滴滴), One 97 Communications Ltd and DoorDash Inc.
Softbank, which reports earnings today, has used buybacks in the past to bolster its own stock. Alibaba is by far its most valuable holding.
A spokesperson for Softbank declined to comment.
The Alibaba filing with the US Securities and Exchange Commission will allow the company’s stockholders whose shares have never been registered with the SEC to have the flexibility to sell their shares, Citi said.
The registration could also cover the company’s need to issue new shares for the employee equity incentive plan.
Alibaba registered about 2 billion ADS when the company conducted its IPO in the US in 2014.
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