SoftBank Group Corp is set to offload nearly all its remaining shares in Alibaba Group Holding Ltd, with the transaction reducing SoftBank's stake in the Chinese e-commerce giant to just 3.8%, according to an analysis of regulatory filings by the Financial Times. The filings were submitted to the U.S. Securities and Exchange Commission.
The Japanese conglomerate, headed by billionaire founder Masayoshi Son, has already sold around $7.2 billion worth of Alibaba shares this year through prepaid forward contracts, the report revealed.
In a statement to the Financial Times, SoftBank explained that the Alibaba transactions signify the company's transition to "a defensive mode" in response to an increasingly uncertain business landscape. SoftBank added that it would disclose the specifics of the deal in its quarterly results announcement scheduled for May.
Neither Alibaba nor SoftBank immediately responded to Reuters' requests for comment. Following the news, Alibaba's U.S.-listed shares declined by 1.3% in after-market trading.
In 2021, SoftBank recorded a $34 billion gain by reducing its stake in Alibaba from 23.7% to 14.6%. The move was part of SoftBank's efforts to bolster its cash reserves in light of significant losses experienced by its Vision Fund unit.
Since reaching peak values in late 2020, Alibaba's worth has decreased by over two-thirds. The decline has been driven by the Chinese government's crackdown on the tech sector, which has involved a sizable fine on Alibaba and close examination of founder Jack Ma's business empire.