SoftBank has raised as much as $22bn in cash from deals that would sharply reduce its stake in Alibaba over the coming years, as the Japanese investor responds to a market downturn that has ravaged its technology portfolio.
The group, led by billionaire founder Masayoshi Son, has this year carried out the sale of about one-third of its Alibaba stake through prepaid forward contracts — a type of derivative to which SoftBank has increasingly turned to raise cash immediately while retaining the possibility of holding on to the shares.
SoftBank has now sold more than half its Alibaba holdings through these forward sales. That could shrink its stake in the Chinese ecommerce giant below the threshold for retaining its board seat and prevent the Japanese group from recognising its share of Alibaba’s income in its financial statements.