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Reuters
Published
Jun 5, 2019
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SoftBank Group to book 1.2 trillion yen profit on Alibaba share sale

By
Reuters
Published
Jun 5, 2019

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 transaction leaves SoftBank with a 26% stake in Alibaba worth $101 billion - Reuters


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.

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 program 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 capitalization 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.
 

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