Alibaba Group Holding Ltd. registered one billion previously unregistered American depositary shares, indicating that SoftBank Group Corp. may be considering selling some of its shares.
SoftBank of Japan backed Alibaba prior to its initial public offering, and as a result, a sizable portion of its stake in the company is not registered as ADSs, according to Citigroup Inc. analysts including Alicia Yap. SoftBank owns 5.39 billion ordinary shares in Alibaba, which equates to 673.76 million ADSs, or a 24.8 percent stake, according to Citi.
Alibaba’s Hong Kong shares fell up to 4.6 percent, outperforming the Hang Seng Index. SoftBank’s stock increased by as much as 5.4 percent in Tokyo.
Masayoshi Son’s SoftBank has come under fire in recent months as the value of numerous portfolio companies has declined due to the technology downturn. SoftBank’s shares have fallen roughly 50% from their peak last year, as the value of the company’s holdings has declined, including Didi Global Inc., One 97 Communications Ltd., and DoorDash Inc.
SoftBank, which will report earnings Tuesday, has previously used share repurchases to boost its own stock price. Alibaba is by far the most valuable asset in the company.
A representative for SoftBank was not immediately available for comment.
Alibaba Notifies the Securities and Exchange Commission of an Additional 1 Billion ADS Registration
According to Citi, Alibaba’s filing with the United States Securities and Exchange Commission will enable stockholders who have never registered their shares with the SEC to sell them. Additionally, the registration may cover the cost of new shares issued for the employee equity incentive plan.
Alibaba registered approximately 2 billion ADSs in the United States during the company’s 2014 initial public offering.