After suffering huge losses, SoftBank plans to reduce its Alibaba stake from 23.7% as of June 30 to 14.6%, raising around $34B in the current quarter
Kosaku Narioka / Wall Street Journal :
Context & Ripple Effects
SoftBank's Alibaba holding has long functioned as its balance sheet: back in 2018 the stake was worth $132B — more than SoftBank's own market cap — and the $7.9B selldown in 2016 established the template of selling Alibaba stock to repair the group's finances. Days before this announcement, SoftBank had already lined up $22B in pre-arranged deals that would sharply reduce the stake over the coming years, so this $34B raise is the first tranche executing on that plan.
First-order effects
- SoftBank raises roughly $34B in cash this quarter and cuts its Alibaba stake from 23.7% to 14.6%, shrinking its single most valuable asset by nearly half.
- Alibaba's investor base must absorb a large new supply overhang, landing on a stock already pressured by weak Chinese retail consumption and net income down more than 75%.
Second-order effects
- The proceeds go toward restoring a balance sheet dented by Vision Fund problems at Didi and Arm — losses that had driven seven straight days of share declines in late 2021 — reducing SoftBank's dependence on Alibaba as collateral of last resort.
- Each tranche SoftBank sells keeps persistent discount pressure on Alibaba shares, effectively transferring the cost of SoftBank's losses to Alibaba's remaining shareholders and buyback capacity.
Third-order effects
- The trajectory held: filings later showed SoftBank sold roughly $7.2B more in 2023, cutting the stake to 3.8% — the founding bet converted from strategic anchor into a drawdown liquidity reserve.
- If the pattern continues, SoftBank's valuation logic shifts fully to a sum-of-the-parts story in which Alibaba is no longer the core asset but a cash buffer tapped whenever Vision Fund losses demand it.
The trend: SoftBank is systematically converting its Alibaba stake from a strategic anchor holding into a revolving liquidity reserve, with each loss-driven selldown shrinking its claim on the asset that once defined it.