SoftBank, one of Japan’s top telecommunications companies, has denied rumors that it would cash in on its stocks of Chinese online retailer Alibaba when it lists publicly on the New York Stock Exchange in what is touted to be one of the biggest stock market debuts by a technology company. Masayoshi Son, SoftBank’s billionaire CEO, assured that it would hold on to its stakes in the company Son says that Alibaba is essential to the SoftBank group as of the moment.
“There are 1,300 companies in the SoftBank group but the only ones I sit on the board of are SoftBank, Yahoo Japan and Alibaba,” Son said at a news conference following the release of SoftBank’s annual earnings on Wednesday. The Japanese company has been on an acquisition spree of late, a splurge that leaves the company holding around USD$90 billion in debt, and with the interest on that debt could be more. But from Alibaba’s initial public offering, SoftBank is expected to see its 34.4 percent holding in the company to increase in value to more than USD$50 billion. Alibaba controls 80 percent of online commerce in China, and Son says that because of this it is indispensable strategic partner in his mobile Internet empire. SoftBank is currently the biggest shareholder in Alibaba, and there was speculation that the Japanese conglomerate would use the IPO to cash in for a return on the investment it initially injected – totaling to around USD$220 million.
Son said that as the IPO matures, SoftBank’s percentage stake in Alibaba may actually dip, but it will not be selling in the near future. “Of course that doesn’t mean we promise to hold it forever, but for now we consider Alibaba a core strategic partner,” he said. It can be remembered that SoftBank spent USD$21.6 billion to buy Sprint Corp. last summer, the United States’ third-largest mobile operator. Rumors abound that Son is also targeting U.S.’s no. 4 mobile provider, T-Mobile US Inc.
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