Alibaba Sells $360M Bilibili Stake to Fuel AI Ambitions and Business Revamp

Alibaba Group Holding Ltd BABA has offloaded nearly $360 million worth of stock in Bilibili Inc BILI, a Chinese streaming platform, marking a significant step in its strategy to gather funds for AI investments and rejuvenate its business. 

The e-commerce giant sold 30.85 million Bilibili American depositary receipts at $11.60 each, which reflects a 5.5% discount to Bilibili’s closing price on a recent Wednesday, leading to a plunge in Bilibili’s stock. 

This sale is part of Alibaba’s broader initiative to divest from various sectors, including electric vehicles and AI, to focus more on its core retail and technology ventures, particularly in cloud computing and artificial intelligence, Bloomberg reports.

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Alibaba’s recent actions include reducing its investments in firms like XPeng Inc XPEV, SenseTime Group Inc, and GogoX Holdings Ltd while simultaneously leading funding rounds for Chinese AI startups. 

The sale of Bilibili shares comes when Alibaba, under new CEO Eddie Wu, is intensifying investments in its flagship operations to ward off competition from rivals like PDD Holdings Inc PDD and ByteDance Ltd. 

Bilibili, once a critical ally for Alibaba, particularly in advertising, faces challenges in generating consistent success in mobile games and online commerce, remaining unprofitable despite years of operation and collaboration with Alibaba on content creation since 2018.

Alibaba stock lost 12% in the last 12 months. Co-founder Jack Ma reportedly decided not to reduce his stake in the company following its most significant selloff in over a year. 

Prior reports indicated co-founder Jack Ma’s plans not to reduce his shareholding in the company, even after its most significant selloff in over a year. 

This choice to retain his shares reflects Ma’s enduring belief in Alibaba’s potential, notwithstanding the company’s recent setbacks, such as the aborted attempt to separate its $11 billion cloud division—a decision that contributed to a dramatic $22 billion loss in Alibaba’s market valuation in just one day.

Investors can gain exposure to Alibaba via Global X Artificial Intelligence & Technology ETF AIQ and SPDR NYSE Technology ETF XNTK.

Price Action: BILI shares are trading lower by 2.50% at $10.92 premarket on the last check Friday.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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