Alibaba files another 1 billion ADS

Recently, Alibaba Group Holding Ltd. (NYSE: BABA) filed one billion more American depositary shares. According to analysts, this implies that SoftBank Group Corp. might have been planning to sell a portion of its holding in the Chinese e-commerce behemoth. The BABA stock suffered miserably following this news.

The share registration, which was revealed in a US SEC filing on Friday, resulted in Alibaba’s stock falling over 4.5% in Hong Kong on Monday, the largest decline in the standard Hang Seng Index.

According to Citigroup Inc. analysts including Alicia Yap, SoftBank made an investment in Alibaba before the company’s first public offering, which means a major chunk of its assets were not registered as ADSs. According to the analysts, registering the shares allows holders to sell them more easily. Alibaba’s requirement to issue fresh stocks for its employee equity incentive program may also be covered.

According to Citigroup calculations, SoftBank possesses 5.39 billion common stock of Alibaba, or 673.76 million ADSs, or a 24.8% interest. Alibaba’s initial public offering (IPO) in the U.S. resulted in the registration of about 2 billion ADSs in the year 2014.

SoftBank, led by Masayoshi Son, has been under fire in previous months as such a sell-off in technology equities has driven down the value of portfolio businesses such as One 97 Communications Ltd., Didi Global Inc., and DoorDash Inc. SoftBank’s stock has lost over half of its value since its high last year.



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