Japanese tech investor SoftBank previously sold a large part of its stake in Chinese online store Alibaba to reassure investors. The Japanese company active in telecommunications, media, e-commerce, internet, robotics, finance and marketing previously reported a record loss of just under 23 billion euros in the past quarter. SoftBank then wanted to “show immediately” that it is financially healthy.
SoftBank’s chief financial officer, Yoshimitsu Goto, admitted in an interview with the British business newspaper ‘Financial Times’ that the step to sell the pieces of Alibaba was taken quite abruptly. Such a move was downplayed by the company for years. Goto contradicted market concerns about SoftBank’s ongoing losses that could put a strain on its relationship with lenders. But he did admit that the sale was intended to reassure investors.
Just two days after reporting its worst-ever quarterly results, SoftBank revealed it posted a $33.4 billion profit on the sale of Alibaba shares. Partly due to the earlier investment in Alibaba, SoftBank was known as one of the world’s largest tech investors. The sale was therefore primarily intended to strengthen the company’s balance sheet. But the timing of the sale is also politically sensitive. In China, there has been a strong crackdown on technology companies lately. Diplomatic relations between Beijing and Tokyo are tense.
After the sale of the pieces, SoftBank still owns 14.6 percent of Alibaba. At the end of June, that was still almost a quarter.
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