SoftBank Group reduces its stake in Alibaba and gets

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SoftBank Group announced on Wednesday that it will record a gain of $34.1 billion by reducing its stake in Alibaba Group Holding, the giant investment group looking to improve its financial reserves in the context of difficult conditions on the capital market, Reuters reports.

The Japanese company will reduce its stake in online retailer Alibaba to 14.6%, from 23.7%, by settling prepaid forward contracts.

SoftBank posted a $50 billion loss at its investment arm Vision Fund in the first half of the year due to the negative performance of its investments in technology companies.

SoftBank CEO Masayoshi Son vowed on Monday to further reduce investment activity and cut costs.

By settling the contracts for Alibaba shares, SoftBank “will be able to eliminate concerns about future cash outflows and, in addition, reduce costs associated with these prepaid forward contracts,” it said in a filing with regulators.

In 2000, Son bought $20 million worth of Alibaba shares, and the development of the Chinese company into one of the world’s largest e-commerce companies helped SoftBank hone its image as an investor in the sector. technology.

But Alibaba’s market capitalization has fallen by more than two-thirds from late-2020 highs as the company has been hit by Beijing’s tougher tech regulation measures, which have included a huge fine for Alibaba and a crackdown on its business empire of founder Jack Ma.