The shares of Chinese giant Alibaba (BABA.US) have come under pressure amid news that one of its large institutional shareholders, SoftBank, has almost sold shares worth more than $7.2 billion. The institution reduced its stake to 3.8%, and the sale took place on the over-the-counter market.
- The chairman of the Japanese institution that made the sale - Masayoshi Son - was one of the first people to help Alibaba grow, with a $20 million investment in 2000. Son stepped down from Alibaba's board in 2020, shortly after company co-founder Jack Ma resigned from SoftBank's board;
- The institution acquired a 25% stake in Alibaba roughly three years ago, for about $100 billion. At the time, the company was SoftBank's largest investment. Since then, SoftBank has suffered huge losses, with its VisionFund reporting $5 billion in losses in February, due to a slowdown in the technology sector that has weighed down valuations - including of Chinese businesses;
- Alibaba operates in several sectors including e-commerce and technology, and there have been recent reports of the spin-off of its 6 individual units. The reports eased concerns about the state's influence on China's private sector and appealed to investors. They also fueled a rebound in the Chinese stock market.
Alibaba (BABA.US) shares, D1 interval. Bulls in the near term have to overcome the 38.2 Fibonacci retracement of the upward wave initiated in the fall of 2022 if they want to maintain momentum. The main support is set by the SMA200 average (red line) - as long as the price is above it, the trend remains upward. Source: xStation5
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