Japan: SoftBank's Shares Drop as Alibaba IPO Eliminates Proxy Appeal

Japanese telecoms firm SoftBank, the largest shareholder in Chinese e-commerce giant Alibaba Group with a 32% stake, dropped in Tokyo trade after Alibaba's US IPO eliminated SoftBank's proxy appeal.

SoftBank's stock finished 6.10% lower at 8,207 yen in Tokyo on 22 September as market participants, eyeing Softbank's shares as an alternative to the Chinese firm, could now purchase Alibaba shares directly, Bloomberg reported.

By comparison, the benchmark Japanese Nikkei 225 share average finished 0.71% lower.

SoftBank's Gains

SoftBank has said that it expected a gain of nearly 500bn yen ($4.6bn, £2.8bn, €3.6bn) from Alibaba's 19 September NYSE flotation.

SoftBank in a statement on 20 September said that it will book the estimated 500bn yen gain in the half-year ending September 2014, and that it will announce a precise figure at a later date.

The gain was recorded to reflect Alibaba's increased asset value with the issuance of new shares and the conversion of preference shares to common stock in conjunction with the listing.

Yahoo Stake

Meanwhile, shares in Yahoo, the only other publicly traded firm to hold a stake in Alibaba, lost 2.74% on 19 September post the Chinese firm's IPO.

Yahoo's 22.4% stake in Alibaba is valued at around $37bn.

At the end of the day's trade on 19 September, Alibaba's market value was $231.44bn - more than the combined market caps of Amazon and eBay.

SoftBank's stock had surged 11.54% over the past month, in anticipation of the Chinese firm's US listing, compared with Yahoo's 8.74% rise.