The End of Jack Ma’s Reign: SoftBank Bids Goodbye to Alibaba

Japanese tech investment giant SoftBank Group and Chinese e-commerce giant Alibaba are nearing the end of their long partnership. SoftBank had effectively sold or financed its entire remaining stake in Alibaba, chief financial officer Yoshimitsu Goto told reporters after the group announced its performance on May 11.

As for the portion of Alibaba’s shares that SoftBank still previously held, Goto said the company had financed the shares with cash through financial instruments such as “prepaid forward contracts” and other means. This means that SoftBank has actually sold these shares but has the right to buy them back at a later date.

According to SoftBank, over 23 years, its 7.4 billion yen investment in Alibaba turned into 9.7 trillion yen. Based on the current exchange rate, the investment of $54.5 million turned into $71.5 billion.

When Alibaba Was Unknown

SoftBank’s support of Alibaba for over two decades created an era for Alibaba and the Chinese internet.

Masayoshi Son, SoftBank’s chief executive, first backed Alibaba in 2000 when SoftBank Group invested $20 million in it when it was a small, unknown company less than a year old.

It is widely rumored that Son made the decision within minutes of meeting Jack Ma, the founder of Alibaba.

In 2004, SoftBank made an additional investment in Alibaba. After several rounds of adjustments, it holds as much as 34.4 percent of Alibaba’s stock. With SoftBank’s longtime support, Alibaba not only became China’s e-commerce leader but one of the world’s largest technology companies.

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