Softbank Group Corp is moving to sell the majority of its stake in Chinese Internet giant Alibaba Group Holding Ltd (阿里巴巴), the Financial Times reported, the latest sign of long-time China investors lowering their exposure.
The Japanese technology investor has sold more than US$7 billion in Alibaba shares this year through prepaid forward contracts, after selling US$29 billion last year, the newspaper said.
The contracts give Softbank the option to buy the shares back, but the group has settled previous deals by handing over the stock, the Times reported.
Photo: Reuters
Pummeled by losses on its start-up bets, Softbank has said it would prioritize financial discipline before seeking the right time to go on the offensive with investments.
Investors are also speculating if the company might launch another buyback program.
Alibaba shares fell as much as 5.2 percent in Hong Kong yesterday, erasing about US$13 billion of market value. Softbank shares were little changed in Tokyo after dropping about 8 percent this year.
The sales are likely to reduce the Japanese conglomerate’s ownership of Alibaba to less than 4 percent, the paper said, citing its analysis of regulatory filings.
That is down from about a 14.6 percent stake the company said it was slated to hold as of the end of September last year. Softbank once owned about one-third of the company spanning from an early US$20 million investment in one of venture capital’s most famous bets.
“We think progress in the monetization of asset holdings would boost the chances of a buyback announcement,” Citibank analyst Mitsunobu Tsuruo said.
Alibaba, along with other technology companies, has come under intense scrutiny from the Chinese government in recent years, and its shares have tumbled.
The online commerce leader last month said it plans to split its US$240 billion empire into six units to raise funds individually and explore initial public offerings.
Softbank, once one of Silicon Valley’s largest investors, has shouldered billions of US dollars of losses on its Vision Fund, which had lifted valuations in start-ups worldwide with its large bets on hundreds of fledgling companies.
The Vision Fund unit last year cut staff as it stopped chasing new investments.
Softbank this week said it plans to sell early-stage venture capital arm Softbank Ventures Asia Corp, one of the avenues by which it scouted promising start-ups.
Softbank founder and CEO Masayoshi Son has said he wants to focus on a planned listing of chip design unit Arm Ltd later this year and make the debut “the biggest” in the history of the chip industry.
The relisting of Arm, which had traded on the London exchange prior to Softbank’s US$32 billion acquisition in 2016, is expected to be a windfall for the world’s biggest technology investor.
Taiwanese suppliers to Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) are expected to follow the contract chipmaker’s step to invest in the US, but their relocation may be seven to eight years away, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. When asked by opposition Chinese Nationalist Party (KMT) Legislator Niu Hsu-ting (牛煦庭) in the legislature about growing concerns that TSMC’s huge investments in the US will prompt its suppliers to follow suit, Kuo said based on the chipmaker’s current limited production volume, it is unlikely to lead its supply chain to go there for now. “Unless TSMC completes its planned six
Intel Corp has named Tasha Chuang (莊蓓瑜) to lead Intel Taiwan in a bid to reinforce relations between the company and its Taiwanese partners. The appointment of Chuang as general manager for Intel Taiwan takes effect on Thursday, the firm said in a statement yesterday. Chuang is to lead her team in Taiwan to pursue product development and sales growth in an effort to reinforce the company’s ties with its partners and clients, Intel said. Chuang was previously in charge of managing Intel’s ties with leading Taiwanese PC brand Asustek Computer Inc (華碩), which included helping Asustek strengthen its global businesses, the company
Power supply and electronic components maker Delta Electronics Inc (台達電) yesterday said second-quarter revenue is expected to surpass the first quarter, which rose 30 percent year-on-year to NT$118.92 billion (US$3.71 billion). Revenue this quarter is likely to grow, as US clients have front-loaded orders ahead of US President Donald Trump’s planned tariffs on Taiwanese goods, Delta chairman Ping Cheng (鄭平) said at an earnings conference in Taipei, referring to the 90-day pause in tariff implementation Trump announced on April 9. While situations in the third and fourth quarters remain unclear, “We will not halt our long-term deployments and do not plan to
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
RSS