You must be aware that Alibaba, the Chinese giant, just released huge news in the market when it announced that they are splitting the company into six different parts and also the fact that all of these six companies will have an independent board as well as an option to release their IPOs later on. However, we also reported about the concerns from the current Alibaba workers that they worry about the departments inside Alibaba that are not working at all to be shut down once Alibaba becomes a separate entity. Now, this is a real concern and we don’t know if SoftBank thinks the same or not but they have made a big move.
It is reported that SoftBank has sold most of its stock in Alibaba according to recent regulatory filing. According to an earlier estimate, SoftBank held 25% stake in Alibaba worth over $100 billion and it has just sold $7.2 billion worth of those shares. It is also known that SoftBank itself is not having the best of times in the industry as its vision fund is suffering a lot due to the tech sector going down in the recent times. It is to be noted that SoftBank and its Vision Fund are responsible for funding most of the major tech companies that have seen success in the recent times. At the same time, many of them have failed as well and it all adds up on the balance sheet for SoftBank.
Alibaba, when it announced the decision to split up into six different entities, said that this move is “designed to unlock shareholder value and foster market competitiveness,” and we believe that this could be a strategic move from SoftBank to invest in an entity from Alibaba later on that is performing well. Masayoshi Son, the founder and CEO of SoftBank, had invested $200 million in 2000 for Alibaba to grow into a leader which it is right now. SoftBank said that it would operate in “defense” mode and be more “conservative” going forward all thanks to its straight fourth quarterly lose report of about $5 billion in the quarter that just ended.