Alibaba Cloud, the cloud computing subsidiary of Alibaba, unveiled its ChatGPT-style product Tongyi Qianwen at the Alibaba Cloud Summit 2023 on Tuesday morning.
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Ali Baba shares fell nearly 3% in after-hours trading after regulatory filings revealed SoftBank had sold the majority of its stake in the company.
SoftBank sold about $7.2 billion worth of shares in the Chinese e-commerce giant via prepaid futures, according to a analysis filings by The Financial Times, released Wednesday. Due to the sales, the report notes that SoftBank will now only retain a 3.8% stake in Alibaba, which has a market capitalization of more than nearly $250 billion.
Only about three years ago, SoftBank retained a nearly 25% stake in the tech giant worth more than $100 billion. At the time, Alibaba was SoftBank’s most valuable investment.
But over the years, SoftBank and its Vision Fund have posted huge quarterly losses amid a slowdown in the tech sector that has sent valuations plummeting. In February, the Vision Fund posted a pre-tax loss of 660 billion Japanese yen (about $5 billion), marking the unit’s fourth consecutive quarterly loss.
At the time, Masayoshi Son, founder and CEO of the Japanese tech conglomerate and holding company, said SoftBank would operate in a “defensive” mode and be more “conservative”.
Son invested $20 million in Alibaba in 2000, helping the e-commerce startup become one of the biggest tech companies in the world.
In March, Alibaba announced it would split into six business groups, with each unit able to receive its own funding and eventually go public. The move was “designed to unlock shareholder value and foster market competitiveness,” Alibaba said in a statement.
In 2020, Son resigned from the board of Alibaba, shortly after Alibaba co-founder Jack Ma resigned from the board of SoftBank.
Show: AI could help Alibaba drive growth in cloud business.