Softbank Group, led by Chairman Masayoshi Son, has sold its remaining stake in Chinese e-commerce giant, Alibaba Group Holding Ltd., in a bid to raise funds after a series of investment failures left the company struggling with liquidity issues. The sale of its shares, valued at $7.2 billion, has further fueled speculations of a complete sell-off.
According to reports, Softbank has submitted documents to the US Securities and Exchange Commission (SEC) confirming its plans to sell off all of its Alibaba shares. Softbank’s Vision Fund, led by Son, had sold off $9.5 billion worth of Alibaba shares earlier this year, reducing its stake in the company to 3.8%.
Softbank’s decision to sell off its stake in Alibaba has been attributed to poor investment performance, compounded by the economic slowdown in China, which has led to a further decline in the share prices of key technology companies. The move comes at a time when Softbank subsidiary, ARM, a UK-based semiconductor design company, is preparing to go public.
Industry analysts suggest that Softbank is focusing on selling off its Alibaba stake to shore up its liquidity. The company’s founder, Son, had invested $20 million in Alibaba in 2000, reaping a return of 2,000 times his investment when the company went public in 2014, earning a profit of $225 billion. However, the recent delisting of Chinese ride-hailing giant, Didi Chuxing, following a data security scandal, has resulted in a sharp decline in Alibaba’s stock value.
Alibaba’s stock value plummeted by 70% as a result of regulatory pressure and poor financial performance, causing significant losses to Softbank’s investment. With the company facing mounting pressure to maintain liquidity, the sale of its remaining stake in Alibaba has been seen as a necessary move to ensure its survival.
Softbank’s woes have come as a shock to the industry, given its reputation as a major player in the tech investment world. However, the recent series of investment failures, coupled with the global economic slowdown, has led to a significant decline in the company’s fortunes. As it struggles to stay afloat, the future of Softbank remains uncertain.