Alibaba shares fall sharply on Thursday, prompted by news that China is investigating e-commerce giant over antitrust issue, spilled over
a Japanese holding company that is Alibaba’s largest investor.
SoftBank (ticker: 9984.Japan) has a share of 24.9%
(GRANDMA) worth about $ 143 billion. That’s more than SoftBank’s current market capitalization of $ 135 billion. A 13% drop in Alibaba’s share on Thursday reduced the value of SoftBank’s stake in the company by more than $ 22 billion.
SoftBank founder Masayoshi Son invested $ 20 million in 2000 in his friend Jack Ma’s start-up e-commerce company, which could have been the best investment in history.
In 2020, SoftBank ran an aggressive campaign to sell assets to raise money to buy shares and repay debt. Since falling at the bottom of sales in the spring, SoftBank shares have more than tripled, leading to the company’s peak of 20 years. SoftBank sold a small portion of its shares in Alibaba as part of an asset sale program, but still holds most of its position.
A SoftBank spokesman declined to comment.
Meanwhile, the market interpretation of how the situation could affect other e-commerce performances based in China is very different.
(JD), a broadband network retailer that originally focused on consumer electronics, says on its website that it is “China’s largest online retailer and largest overall retailer, as well as the country’s largest Internet company by revenue.” While you might consider Alibaba’s investigation good news for JD.com, investors instead seem concerned that it, too, could face closer scrutiny. JD fell 1.1%, to $ 84.49 on Thursday.
But the market is looking up
(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 at [email protected]