BABA Stock Alert: SoftBank Moves to Sell Alibaba Stake

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  • Alibaba (BABA) stock is advancing even though Softbank (SFTBY) has reportedly sold most of its large stake in the Chinese conglomerate.
  • Based on Softbank’s previous statements and actions, the news may not have surprised the market much.
  • Better-than-expected Chinese economic data may be lifting BABA stock.
BABA stock - BABA Stock Alert: SoftBank Moves to Sell Alibaba Stake

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Alibaba (NYSE:BABA) stock is climbing about 3% in early trading today even though Japanese holding company Softbank (OTCMKTS:SFTBY) has reportedly sold most of its stake in the Chinese conglomerate.

Stronger-than-expected Chinese economic data may be cushioning the impact on BABA stock. Additionally, the Japanese firm unloaded a great deal of its stake in BABA last year and has said it would look to be more conservative going forward, so the market may have expected it to continue reducing its BABA stake in 2023.

Softbank’s Moves

The Japanese investment bank has reduced its BABA stock position by roughly $7.3 billion, Bloomberg reported. Softbank sold the shares using “prepaid forward contracts,” the news service explained.

As a result, Softbank now owns just 4% of BABA, down from 13.7% as of the end of last year.

Mitigating Forces

As of December 2022, the Japanese investment bank had already reduced its stake in BABA by nearly 20 percentage points from the peak level of 33%. Additionally, Softbank had said previously that it was looking to become more conservative after it suffered huge losses on its investments in new technology firms.

Finally, better-than-expected Chinese economic data announced today may be cushioning the blow on BABA stock. Specifically, the country reported that its exports had soared nearly 15% in March versus the same period a year earlier, versus the average estimate of a 7% year-over-year decline.

The Recent Performance of BABA Stock

BABA stock has climbed 16% in the last month, but it has fallen 17% in the preceding three months. The stock has risen 5% so far this year.

On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


Article printed from InvestorPlace Media, https://investorplace.com/2023/04/baba-stock-alert-softbank-moves-to-sell-alibaba-stake/.

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