No more ‘Khul Ja SimSim’: SoftBank Exiting Alibaba

SoftBank Group International is reportedly heading towards, the sale of its majority stake in Chinese internet giant 阿里巴巴集团 . It has already sold more than $7 billion #Alibaba shares this year through prepaid forward contracts, close on the heels of the $29 billion sale of last year. Although the contracts come with the option of #buyback of shares, the group has chosen to settle prior deals through stock handover.

The stake sale is expected to drastically reduce the Japanese major’s ownership in Alibaba to less than 4% from 14.6%. It’s pertinent to note that #Softbank once owned a third of Alibaba, which was undoubtedly one of its premier bets. Hurt by the riskiness of some of its startup bets, Softbank is believed to be in the process of restoring a sense of #financialdiscipline.

• In response to the Softbank gesture, Alibaba shares dropped 5.2% in Hong Kong eroding $13 billion of #marketvalue
• Analysts opine that improvement in the monetization of asset holdings will increase the likelihood of a buyback announcement
• The Softbank exit, observers believe, could be a blessing in disguise for Alibaba which has recently announced its intent to split its $240 billion realm into six independent divisions, which would in turn explore its plans of fundraising, including the IPO option

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