SoftBank to gain $34 billion from cutting Alibaba stake
SoftBank Group Corp said on Wednesday it would book a gain of $34.1 billion by cutting its stake in Alibaba Group Holding, as the investment behemoth looks to shore up its cash reserve to weather the market downturn.
The Japanese company will reduce its stake in Alibaba from 23.7% to 14.6% by settling prepaid forward contracts.
The Japanese company will reduce its stake in Alibaba from 23.7% to 14.6% by settling prepaid forward contracts.
The SoftBank transaction is not expected to result in additional sales of Alibaba shares on the market as the shares were hedged at the time of the original monetisation, SoftBank said, adding it would "continue to maintain a good relationship with Alibaba."
"It is a mixed situation for Alibaba investors, if you were a long-term investor who believes in the future of the company, it is ok. However, there will be some incremental near-term selling pressure at this point," said Bo Pei, analyst at US Tiger Securities.
"It is a mixed situation for Alibaba investors, if you were a long-term investor who believes in the future of the company, it is ok. However, there will be some incremental near-term selling pressure at this point," said Bo Pei, analyst at US Tiger Securities.
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whqqq : agree If you have confidence in the future of the company, it's no big deal.