Here's Why Jefferies Sees More Alibaba Stake Sale By SoftBank

SoftBank Group Corp SFTBY SFTBF sold 20 million Alibaba Group Holding Ltd BABA shares in the last quarter and "will need to sell more in 2022," as per Jefferies analyst Atul Goyal, Reuters reports.

• The group will need $40 billion-45 billion of cash this year as per Goyal, who sees if it maintains the current pace of investing in startups and share repurchases as part of the 1 trillion yen ($8.7 billion) program announced in November.
• SoftBank prioritizes Vision Fund 2, which has taken stakes in over 200 companies, including recent investments in AI software firm 6sense, digital financing platform Funding Societies, and cryptocurrency business Polygon.
• SoftBank is under pressure to trim stakes after Arm - NVIDIA Corp NVDA deal cancellation served as a significant tipping point.
• "We will definitely be selling a good chunk of assets," SoftBank CEO Masayoshi Son told analysts earlier this month, pointing to options including the public Vision Fund portfolio, where many assets are trading below their listing price.
• SoftBank's loan-to-value ratio rose to 22% at December-end from 19% three months earlier. The ratio is closer to 30% after including additional borrowing, Goyal estimates.
• Price Action: BABA shares traded lower by 4.11% at $114.10 premarket on the last check Tuesday.