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Charly Triballeau / AFP via Getty Images
The sharp drop in Alibaba Group shares on Thursday, triggered by news that China is investigating the e-commerce giant over antitrust issues, has translated into shares of
SoftBank Group,
the Japan-based holding company that is Alibaba’s largest investor.
SoftBank (ticker: 9984. Japan) has a 24.9% interest in
Alibaba
(BABA) worth approximately $ 143 billion. That’s greater than SoftBank’s current market cap of $ 135 billion. The 13% drop in Alibaba shares on Thursday lowered the value of SoftBank’s stake in the company by more than $ 22 billion.
SoftBank founder Masayoshi Son made a $ 20 million investment in his friend Jack Ma’s fledgling e-commerce company in 2000, in what was arguably the best venture investment in history.
SoftBank ran an aggressive campaign in 2020 to sell assets to raise money for share buybacks and debt repayments. Since the low of the spring sell-off, SoftBank shares have more than tripled, pushing the company’s US-listed shares to a peak in 20 years. SoftBank has sold a small portion of its Alibaba shares as part of the asset sale program, but retains most of its position.
A SoftBank spokesman declined comment.
Meanwhile, the market’s interpretation of how the situation could affect other China-based ecommerce games is decidedly mixed.
JD.com
(JD), a broad online retailer originally focused on consumer electronics, says on its website that it is “China’s largest online retailer and largest retailer, as well as the country’s largest Internet company by revenue.” While you might see an investigation into Alibaba as good news for JD.com, investors instead seem concerned that it could also be further investigated. JD fell 1.1% to $ 84.49 Thursday.
But the market is looking up for it
Pinduoduo
(PDD), a China-based online retailer. Shares of Pinduoduo were up 8.9% to $ 152.75.
SoftBank shares fell 4.6% to $ 37.25 on Thursday.
Write to Eric J. Savitz at [email protected]