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SoftBank Expects up to $2.4 Billion Profit on Alibaba Share Sale

June 15, 2016, 10:24 AM UTC
SoftBank Chief Executive Officer Masayoshi Son Earnings News Conference
Billionaire Masayoshi Son, chairman and chief executive officer of SoftBank Corp., speaks in front of a screen displaying the logo of Alibaba Group Holding Ltd. during a news conference in Tokyo, Japan, on Wednesday, May 7, 2014. SoftBank forecast annual earnings that trailed analyst estimates amid tougher competition in Japan and losses at Sprint Corp. in the U.S. Photographer: Tomohiro Ohsumi/Bloomberg via Getty Images
Photograph by Tomohiro Ohsumi — Bloomberg via Getty Images

SoftBank Group said on Wednesday it expects to book profit of 200 billion yen to 250 billion yen ($1.9 billion to $2.4 billion) this financial year from the sale of shares in Alibaba Group Holding.

The Japanese telecommunications company earlier this month said it planned to sell $10 billion worth of Alibaba (BABA) shares to help cut interest-bearing debt, reducing its stake in the Chinese e-commerce firm to around 27% from 32.2%.

The expected profit will come from the sale of $3.4 billion worth of Alibaba shares.

The remaining $6.6 billion worth of shares will be sold by private placement to institutional investors by a SoftBank-controlled trust, but any profit would not be finalised for several years due to the structure of the deal.


The sale of Alibaba shares would be a first for SoftBank (SFTBY) since the Japanese firm’s initial investment in 2000. The two companies said they would maintain a strategic partnership.

Separately, SoftBank has also agreed to sell most of its stake in GungHo Online Entertainment Inc back to the mobile game maker for 73 billion yen. The company said it would announce the expected earnings impact later.

As well as reducing debt, the sales are likely to ease investor concern about SoftBank’s finances that has grown since the Japanese firm’s 2013 acquisition of a majority stake in struggling U.S. wireless carrier Sprint.