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Charly Triballeau / AFP via Getty Images
The sharp drop in shares of the Alibaba group on Thursday, caused by the news that China is investigating the e-commerce giant on antitrust issues, has extended to shares of
SoftBank Group,
the Japan-based holding company that is Alibaba’s main investor.
SoftBank (score: 9984. Japan) has a 24.9% stake
Alibaba
(BABA) worth about $ 143 billion. It is larger than SoftBank’s current market capitalization, which amounts to $ 135 billion. The 13% drop in Alibaba shares on Thursday has reduced 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 new e-commerce business in 2000, in what was possibly the best risky investment in history.
SoftBank in 2020 has been in an aggressive campaign to sell assets to raise cash for stock recovery and debt repayment. Since it fell in market sales in the spring, SoftBank shares have tripled more than that, leading to the company’s U.S. listed shares for up to 20 years. SoftBank sold a small portion of its Alibaba shares as part of its asset sale program, but continues to hold most of its position.
A SoftBank spokesman declined to comment.
Meanwhile, the market’s interpretation of how the situation may affect other Chinese-based e-commerce representations is decidedly mixed.
JD.com
(JD), a broad-based online retailer that originally focused on consumer electronics, says on its website that it is “China’s largest online retailer and the largest retailer in general, as well as the largest the country’s Internet business for revenue “. While you might see an Alibaba survey as good news for JD.com, investors seem concerned that a more detailed examination may also be made. JD fell 1.1% to $ 84.49 on Thursday.
But the market is on the rise
Pinduoduo
(PDD), an online retailer based in China. Shares of Pinduoduo rose 8.9% to $ 152.75.
Shares of SoftBank fell 4.6% on Thursday to $ 37.25.
Write to Eric J. Savitz to [email protected]