(Bloomberg) — Alibaba Group Holding Ltd. has sold about $360 million in shares in Chinese streaming platform Bilibili Inc. at a steep discount. This is the latest in a series of asset deals by the e-commerce pioneer seeking funding to invest in and revitalize AI. business.
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Alibaba sold Bilibili American’s 30.85 million depository receipts for $11.60 each, said the people, who requested anonymity because the information is private. This represents a discount of about 5.5% to the stock’s closing price on Wednesday. On Friday, Bilibili plunged as much as 8.4% in Hong Kong, its biggest decline in two months.
Alibaba has been one of China’s most prolific investors in everything from retailers to startups for more than a decade, but it has begun steadily shedding its holdings over the past year. The company sold stakes in electric car maker XPeng and AI company SenseTime Group, while also reducing its stake in Hong Kong-listed ride-sharing company GoGoX Holdings.
The company is currently in the midst of an overhaul aimed at refocusing its vast business empire on core retail and technology-oriented areas from the cloud to artificial intelligence. Alibaba has led major financings for at least two Chinese AI startups this year, but has signaled its intention to sell stakes in more established companies to free up space in areas with transformative potential. Indicated.
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Apart from investment funds, Alibaba is also embarking on one of the country’s largest shareholder return programs. The company has set up a separate legal entity to manage its portfolio of assets around the world, and analysts see this as a way to sell its holdings. Alibaba remains a key co-owner of major companies such as Weibo and Sun Art Retail Group, and is considering selling its Intime department store division, Bloomberg News reported.
At an earnings conference in February, new CEO Eddie Wu pledged to increase investment in core businesses in light of increased competitive pressure from rivals such as PDD Holdings and ByteDance. Alibaba did not respond to requests for comment. on Thursday.
“This is not surprising as management has often talked about refocusing on its core business,” said Vaysan Lin, managing director of Union Bancare Prive.
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Bilibili is a bit outside of Alibaba’s expertise, but it’s also showing signs of fatigue from battling ByteDance’s Douyin and Kuaishou Technology.
The company’s mobile games division has been unable to produce consistent hits and reported a 12% decline in revenue for the December quarter. The company’s foray into online commerce also faces stiff competition from Douyin and Xiaohongshu. The Shanghai-based company has been in the red for more than a decade since its establishment.
The e-commerce giant became Bilibili’s largest shareholder in February 2019. Apart from its direct financial interests, Alibaba was a major advertiser on the video streaming site. According to Bilibili’s latest annual report, the two companies began collaborating on content production in 2018.
–With assistance from Zheping Huang and Jeanny Yu.
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