RIYADH: SoftBank Group Corp. has raised $22 billion by selling prepaid forward contracts using the shares of Alibaba Group Holding Ltd.
According to a Financial Times report, SoftBank, in 2022, executed the sale of about a third of its Alibaba stake through these contracts, which helped the firm to raise cash immediately while retaining the chances of holding on to the shares.
The report further noted that SoftBank Group has sold half of its Alibaba shares in the form of these derivatives.
SoftBank currently has plans in place to sell over half of its remaining stake in Alibaba, the report added.
SoftBank has been selling these types of derivatives linked to Alibaba shares since 2016, as it helps the firm to stabilize its shares, which may not happen in straight selling.
SoftBank’s bet on Alibaba during its birth had made its CEO Masayoshi Son the richest man in Japan in the last decade. He, however, lost this crown as Alibaba shares fell due to regulatory pressures.