SoftBank Group to book $11b profit on Alibaba stake sale

REUTERS/Issei Kato

Japan’s SoftBank Group Corp said on Tuesday it expects to book around 1.2 trillion yen ($11.12 billion) in pre-tax profit on the sale of shares in China’s Alibaba Group Holding Ltd.

The sale dates from 2016 when SoftBank sold part of its Alibaba stake via derivatives to fund its acquisition of British chip designer ARM.

The transaction leaves SoftBank with a 26% stake in Alibaba worth $101 billion. The Japanese investment firm said it would book the profit in the financial quarter ending June.

SoftBank Group founder and Chief Executive Masayoshi Son bought into Alibaba for just $20 million in 2000. The Chinese startup’s growth into one of the world’s biggest e-commerce companies has helped burnish Son’s tech investor credentials.

The windfall comes as one of Son’s biggest tech bets, Uber Technologies Inc, has shown lacklustre stock market performance since its market debut last month.

SoftBank booked a 418 billion yen gain on its Uber stake in the financial quarter ended March ahead of the debut. On Monday, Uber’s shares closed 9% below their IPO price at $41.

Son has referred to the value of the Alibaba stake to argue that SoftBank Group’s shares are undervalued. Following the end of a 600 billion yen stock-buyback programme and Uber’s disappointing listing, the shares have fallen 23% from their April high.

SoftBank Group shares closed down 3% on Tuesday ahead of the Alibaba sale announcement, giving the conglomerate a market capitalisation of 10.2 trillion yen.

New York-listed Alibaba is considering a follow-on share sale in Hong Kong to raise as much as $20 billion to boost its investment war chest, people familiar with the matter told Reuters last week.

Reuters

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.