Alibaba’s largest shareholder is selling off nearly $8 billion of its stake in the company.
Softbank invested in Alibaba back in 2000 when the company was still an unlisted startup. The company has since grown to a market cap of more than $200 billion.
Softbank says it wants to cash in some of its 32% stake in the company to boost its own financial position.
The sale comes at a time when Softbank’s annual profits fell by 29% after taking a big hit from its ownership in US wireless carrier Sprint.
Following the news of its sell off the bank said it is still “committed to its partnership with Alibaba.”
This is the first time Softbank has sold shares in Alibaba since its initial investment 16 years ago.
Alibaba said last week that it’s the subject of an SEC investigation in the US over its accounting practices. The company’s membership in the International Anti-Counterfeiting Coalition was also recently suspended.
Alibaba shares declined 2.9% in after-hours trading in New York following the announcement. Alibaba launched a record-breaking $25 billion IPO in September 2014, shares have since dropped off by almost 13%.
As part of the planned sale, Alibaba will buy back $2 billion of its stock held by Softbank. The rest is being sold to a sovereign wealth fund, institutional investors and a group of individuals linked to Alibaba.
Softbank will still maintain a nearly 28% stake following the sale. The next biggest share-holder is Yahoo, which controls about 15% of the company’s ownership.