SoftBank Group CEO Masayoshi Son resigns from Alibaba’s board

Alibaba’s US shares declined 2.5% following the announcement, while SoftBank’s stocks opened 2% higher on Friday.

SoftBank Group Corporation CEO Masayoshi Son said on Thursday 25 June 2020 that he will be stepping down from Alibaba Group Holding's Board of Directors, 15 years after he first took position.

Decision to resign from Alibaba’s board ‘was perfectly amiable’

Son’s resignation from the Chinese e-commerce giant’s board comes roughly a month after Alibaba co-founder Jack Ma announced his own desires to be removed from the board. With effect from Thursday, Ma is no longer on Alibaba’s board.

Son said during SoftBank Group’s annual shareholder meeting that his own departure was not predicated on any disagreements, and that the decision ‘was perfectly amiable’.

SoftBank first pumped in US$20 million into a then-budding Alibaba.com in January 2000, led by Son. When Alibaba went public on the US stock exchange in 2014, SoftBank’s stake in Alibaba grew to US$60 billion overnight, making it the Japanese holding company’s most successful investment ever.

Following the announcement, Alibaba’s American depository share price fell 2.5% to US$221 a share, based on IG trading data.

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SoftBank Group’s equity value back at pre-coronavirus levels

During his virtual presentation on Thursday, Son also attempted to reassure SoftBank investors amid a string of recent investment failures – including the latest: German payments firm Wirecard, which filed for insolvency on the same day, as he stated that the equity value of the group has recovered to pre-coronavirus levels.

‘We have worried a lot of people who thought that SoftBank is finished or is “SoftPunku”’, Son said during the video call. The word ‘SoftPunku’ loosely translates to ‘SoftBankrupt’ in English.

Last month, SoftBank reported its worst annual operating loss ever at 1.36 trillion yen (US$12.7 billion), driven mostly by soured investments caused by the Covid-19 pandemic.

Read more: Alibaba Group's Q4 earnings plummet by 89%

SoftBank has liquidated US$35 billion in assets this year

In the last few months, the group has embarked on a massive campaign to shore up liquidity, including the offloading of a US$20 billion stake in German mobile telecommunications provider T-Mobile via a share sale earlier this week.

To strengthen its balance sheet, the company has liquidated roughly US$35 billion (or 80% of a planned US$41 billion) in assets, so as to buy back shares and reduce its mounting debts.

This strategy has also resulted in the group selling US$11.5 billion worth of Alibaba stocks this year.

For now, SoftBank’s 27.5% stake in Alibaba is still worth a reported US$150 billion.

Thanks to those divestments, Son said the value of SoftBank’s investments increased to 30 trillion yen (US$280 billion) this week, roughly 2 trillion yen (US$18 billion) higher than in March 2020.

SoftBank Group Corp shares closed flat on Thursday, but opened 2% higher on Friday 26 June 2020. Shares continued to rise throughout the session, and are trading at ¥5555 apiece as at 13:10 JST.

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