SoftBank Is Cutting Its Alibaba Stake

Sebastien Callebaut -

The Tech Giant Is Investing The Proceeds Into Unlisted Startups

SoftBank Group Corp is set to reduce its holding in Chinese e-commerce giant Alibaba, according to an analyst, as the Japanese tech titan focusses on unlisted companies and repurchases its shares. In the last quarter, SoftBank sold 20 million Alibaba shares and could sell even more shares in the current year.

  • Some analysts predict that the company will need more than $40 billion in cash this year if it keeps investing in startups and repurchasing shares as part of the $8.5 billion program announced in November
  • SoftBank is focusing on the Vision Fund 2, which has invested in over 200 firms, including AI software company 6sense, digital finance platform Funding Societies, and cryptocurrency company Polygon

Pressure From The Failed Sale Of Arm

Following the failure of the proposal to sell chip creator Arm to Nvidia, the company is under pressure to reduce its stakes in several investments and raise cash. With Nvidia's rising share price, the group was set to get $ 80 billion from the sale. In 2016, SoftBank paid $32 billion for Arm, a company whose technology drives Apple's iPhone and practically all other smartphones.

  • Nvidia's acquisition of Arm would have put it in even more direct conflict with Intel and Advanced Micro Devices in the data center chip market
  • Customers including Qualcomm and Samsung, which design semiconductors for devices ranging from mobile phones to laptops, license Arm's architecture and technologies
  • On the strength of its graphic processor chips, Nvidia has become one of the most valuable chip company in the United States. Graphic processors have become much more commonly employed for artificial intelligence and gaming

Disclaimer

Please note that this article does not constitute investment advice in any form. This article is not a research report and is not intended to serve as the basis for any investment decision. All investments involve risk and the past performance of a security or financial product does not guarantee future returns. Investors have to conduct their own research before conducting any transaction. There is always the risk of losing parts or all of your money when you invest in securities or other financial products.

Credits

Photo by tommao wang on Unsplash.