Recently, it was reported that "SoftBank's shareholding in Alibaba has decreased from 6% -7% in December 2022 to less than 0.5% in May 2023. About half a year ago, Jack Ma, who holds around 4.5% of the shares, surpassed SoftBank and became the largest shareholder of the Alibaba Group." However, as of now, Alibaba has not disclosed any information on this matter. A reporter from Nandu has sought confirmation from Alibaba, and there has been no response as of the time of publication.
At present, Alibaba's latest equity information comes from the 2023 Financial Year Report. The report shows that as of July 12, 2023, SoftBank holds 13.9% of the company's shares, remaining the largest shareholder and the only shareholder with a shareholding ratio of over 5%. But due to a shareholding ratio of less than 15%, SoftBank lost the right to nominate a member of Alibaba's board of directors. At the same time, all directors and executives of Alibaba hold a total of 2.2% of the shares, with Cai Chongxin holding 1.4% and the remaining executives holding less than 1% of the shares.
As of July 12, 2023, the shareholding ratio of Alibaba's major shareholders.
Jack Ma's shareholding information remains at 4.8%
According to the prospectus disclosed by Alibaba upon its return to the Hong Kong Stock Exchange, as of November 2019, Alibaba's equity structure was, with SoftBank holding 25.8% of the shares, making it the largest institutional shareholder of Alibaba; Jack Ma, former Chairman of Alibaba's Board of Directors, holds 6.1% of the shares, while Cai Chongxin, then Executive Vice Chairman of Alibaba Group, holds 2.0% of the shares. Other directors and senior management jointly hold 0.9% of the shares, while other public shareholders hold 65.2%.
According to Alibaba's 2020 Financial Year Report, as of July 2, 2020, the equity structure of Alibaba was 24.9% held by SoftBank, with a total of 7.4% held by all directors and executives of Alibaba. Jack Ma held 4.8% of the shares, while Chongxin Cai held 1.6%. Due to Jack Ma's shareholding in Alibaba decreasing to less than 5% and no longer serving as a member of the board of directors and executives, Alibaba will no longer disclose Jack Ma's shareholding ratio.
As of July 2, 2020, Alibaba's equity structure.
In the fiscal years 2021, 2022, and 2023, there was no significant change in Alibaba's major shareholders, with SoftBank's shareholding ratio decreasing from 24.8% to 13.9% and Cai Chongxin's shareholding ratio remaining at 1.4%.
Alibaba equity as of July 2021 (left) and July 2022 (right).
In fact, since stepping down as the Chairman of Alibaba's Board of Directors on Teacher's Day in 2019, Jack Ma has rarely appeared in public, with only a few appearances mostly related to public welfare, agriculture, and education.
Until 2023, news related to Jack Ma gradually increased, and Jack Ma also made a rare appearance in Alibaba's business. In late May 2023, it was reported in the industry that Ma Yun convened all business leaders of Taotian Group, held a small communication meeting, and pointed out three important directions for Taotian Group: returning to Taobao, returning to users, and returning to the Internet. On November 30, 2023, the closing market value of Pinduoduo's US stock market exceeded that of Alibaba. Jack Ma made a rare statement, congratulating Pinduoduo on its decisions, execution, and efforts over the past few years, and encouraging employees to actively provide constructive feedback. Jack Ma said, "Everyone has been amazing, but only those who can reform for tomorrow's Tianniu and are willing to pay any price or sacrifice are respected. Returning to our mission and vision, Alibaba people, come on!" Recently, Jack Ma's new agricultural brand "1.8 meters" has quietly launched on Taobao. At the same time, industry insiders generally believe that behind Alibaba's series of organizational changes in the past year, Jack Ma is also involved.
Alibaba and SoftBank Accelerate Separation
On the other hand, the relationship between Alibaba and SoftBank Group is constantly weakening. As early as June 25, 2020, Sun Zhengyi, Chairman and CEO of SoftBank Group of Japan, announced at a shareholder meeting that he would withdraw from the Alibaba board of directors with effect from that day. Sun Zhengyi stated that this is his graduation from the most successful investment so far. Previously, SoftBank Group had announced that Jack Ma would step down as a director of SoftBank Group, with his term also ending on June 25th.
Subsequently, Alibaba announced that "Sun Zhengyi has notified the company's board of directors that he intends to resign from his position, effective from June 25, 2020. Sun Zhengyi has been serving as a director of the company since 2005. After Sun Zhengyi's resignation, the company's board of directors will be composed of ten members, including five independent directors. According to the company's organizational rules and regulations, SoftBank still has the right to nominate one director to participate in board elections."
SoftBank Group was founded in 1981 and is a comprehensive venture capital company. In 2000, SoftBank invested $20 million in Alibaba, which had only been established for a year. In 2004, Sun Zhengyi invested another $60 million in Alibaba. As of June 25, 2020, when Sun Zhengyi resigned from the Alibaba board of directors, the value of Alibaba's US stock market reached 595.99 billion US dollars. Based on this calculation, SoftBank held a market value of 153.76 billion US dollars in Alibaba's stock, an increase of more than 1900 times compared to the funds invested that year.
Although Sun Zhengyi expressed his desire to "hold Alibaba stocks as long as possible," SoftBank Group still had to sell Alibaba stocks to rescue it in the face of continuous financial losses and liquidity crisis.
Looking back, SoftBank first reduced its holdings in Alibaba in 2016. In order to raise funds to acquire ARM and establish the world's largest venture capital fund vision, SoftBank cashed out over $10 billion by selling Alibaba stocks; In 2019, SoftBank sold 73 million American Depositary Shares of Alibaba again, with a cash out amount of over 13 billion US dollars, and its shareholding ratio decreased to 25.8%.
Since 2020, SoftBank's reduction in Alibaba's holdings has accelerated, and SoftBank Group has repeatedly stated that the reduction in Alibaba's shares will be used to repurchase company stocks. On May 18, 2020, SoftBank Group announced that it had raised 1.1 trillion yen by selling shares of Alibaba and SB Cloud. On August 10, 2022, SoftBank Group announced that its board of directors had approved early settlement of shares in several prepaid forward contracts (a derivative) related to Alibaba, involving up to approximately 242 million shares of the company's American Depositary Shares (each representing eight shares of the company's common stock). SoftBank Group officially stated that the purpose of selling Alibaba stocks this time is to address the severe challenges of the current stock environment. Choosing to settle these prepaid forward contracts in physical form will eliminate concerns about future cash outflows, further reduce the costs associated with these prepaid forward contracts, and consolidate protective measures against the severe market.
This operation resulted in SoftBank reducing its 9% stake in Alibaba and cashing out over 230 billion yuan. SoftBank Group's shareholding in Alibaba has decreased to within 15%, and SoftBank has also lost its nomination rights for Alibaba's board members.
At the beginning of 2023, a document from the US Securities and Exchange Commission showed that SoftBank had sold approximately $7.2 billion (approximately RMB 49.5 billion) worth of Alibaba shares through prepaid forward contracts, which could lead to SoftBank's stake in Alibaba ultimately dropping to only 3.8%.
Will Jack Ma become the largest shareholder of Alibaba?
In the view of industry insiders, if Jack Ma did not significantly reduce his stake in Alibaba in the past three years and SoftBank Group's shareholding ratio dropped to 3.8%, then the news that Jack Ma replaced SoftBank as the single largest shareholder of Alibaba is highly likely to become a fact.
Due to its own financial pressure, SoftBank's reduction in its holdings in Alibaba has become a definite trend. Therefore, the biggest mystery currently lies in whether Jack Ma has reduced his holdings in Alibaba in the past three years, and what is the current proportion of his holdings in Alibaba?
On November 16, 2023, according to documents disclosed by the US Securities and Exchange Commission (SEC), two entities belonging to the Jack Ma family trust are expected to sell a total of 10 million Alibaba shares around November 21. The entities involved in the stock sale this time are JSP Investment Ltd and JC Properties Ltd, each selling 5 million shares of Alibaba stock. According to regulatory documents, the expected reduction date is around November 21st. This information has been interpreted by the industry as Jack Ma's plan to sell off Alibaba's stock, leading to a sharp drop in Alibaba's US stock price.
On the evening of November 17th, in response to the Ma Yun family trust's reduction plan, Ma Yun's office lawyer clearly responded that the disclosed sale plan is a long-term plan. Jack Ma firmly believes in Alibaba, as its current stock price is far below its actual value, and he will still firmly hold onto Alibaba's stock.
On November 22nd, a partner of Alibaba Group Chief Talent Officer Jiang Fang provided a detailed explanation on this matter in a post posted on the intranet: "In order to invest in agricultural technology and public welfare projects both domestically and internationally, Teacher Ma's office signed a reduction contract with a stock broker earlier this year in accordance with SEC 10b5-1 regulations. According to regulations, this conditional future reduction plan will be announced to the public in mid November. The selling price set in August was much higher than the current stock price, so Teacher Ma did not sell a single share!"
According to documents disclosed by the US Securities and Exchange Commission on January 23, 2024, as of the fourth quarter of 2023, the family fund BluePool of Tsai Chongxin purchased 1.9575 million shares of Alibaba, with a market value of approximately $152 million (approximately RMB 1 billion). According to media reports, Jack Ma also purchased Alibaba's Hong Kong stock worth $50 million (approximately RMB 350 million) in the fourth quarter.
As of the time of publication, there has been no response from Alibaba regarding whether SoftBank Group is close to clearing its holdings in Alibaba and whether Jack Ma has become Alibaba's largest shareholder.
Southern Metropolitan Daily reporters have noticed that in addition to the increase in holdings by Cai Chongxin and Jack Ma, Alibaba Group is also aggressively repurchasing stocks. On the evening of January 2, Alibaba Group issued an announcement at the Hong Kong Stock Exchange that during the 12 months ending December 31, 2023, the company repurchased a total of 897.9 million ordinary shares (equivalent to 112.2 million American depositary shares) at a total price of US $9.5 billion, which also made Alibaba the Internet listed company in China with the largest repurchase effort in 2023.