Japanese multinational conglomerate SoftBank Group Corp SFTBY has raised $22 billion in cash through deals that would significantly reduce its holding alibaba group holding ltd BABA reported in the years to come financial times.
What happened: The group, led by a billionaire masayoshi son, completed the sale of about a third of its stake in Alibaba this year through prepaid futures contracts, the report said, citing documents accessed by FT.
These are derivative contracts that have allowed SoftBank to raise cash immediately, with the option to retain shares in the company.
The forward sale of 213 million shares this year was a resounding success Goldman Sachs Group Inc. GS, Mizuho and UBS Group AG UBSreported the Financial Times.
Since October, SoftBank has sold 40 million shares to complete previously agreed deals that reduced its stake in the company to 23.9% in mid-July from 24.8% previously, the report said.
mission: SoftBank has sold more than 50% of its shares so far Alibaba through those deals, which could reduce its stake in the e-commerce giant below the threshold required for a seat on the board. This could also prevent the Japanese conglomerate from recognizing its earnings from Alibaba in its financial statements, the report said.
SoftBank Losses: The Japanese group has seen dozens of its investments in its company vision fund plunge after a sell-off in tech stocks. In May, Son told investors he would play “defense” after revealing a $27 billion loss Vision Fund in the previous fiscal year, the report said.
price action: SFTBY shares closed nearly 7% higher at $20.87 on Wednesday before falling 1.4% in extended trading Data from Benzinga Pro.