Some of Asia’s largest technology sector investors are trimming their stakes in what seems to no longer be an attractive market. The heated regulatory pressures in China, coupled with falling stock prices, increased competition, and an unfavorable macroeconomic backdrop, are pushing investors away from the once-lucrative Chinese tech companies.
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Two of the major tech investors, Japan-based SoftBank Group Holdings (OTCMKTS:SFTBF) and Tencent Holdings Ltd. (OTCMKTS:TCEHY), have been the biggest sellers of tech shares this year. Let’s take a closer look at the largest share sales of both these investment giants.
What is SoftBank Group Offloading?
Japanese billionaire, Masayoshi Son’s SoftBank Group has sold billions of dollars worth of tech investments this year. Remarkably, SoftBank sold $22 billion worth of shares in Chinese e-commerce giant Alibaba Group Holdings (NYSE:BABA) to pare some of the losses made during the year from the slump in investment values. SoftBank’s Alibaba investment grew from a modest $20 million to over $200 billion at its peak stock price levels. However, after the latest share sale, SoftBank is no longer the majority owner of BABA stock.
Similarly, in November, SoftBank sold part of its stake in the Indian mobile payment company, Paytm. Plus, it sold its stake in Chinese real estate broker KE Holdings Inc. (NYSE:BEKE) for a profit of over $1 billion. Further, SoftBank has stakes in the Indonesian tech company GoTo Group and the Indian delivery start-up Delhivery Ltd.
What is Tencent Selling?
Another Chinese tech investor, Tencent Holdings Ltd., recently sold a $3 billion stake in internet company Sea Ltd. (NYSE:SE) and also sold $16.5 billion worth of shares of tech giant JD.com (NASDAQ:JD) under a special dividend arrangement.
Moreover, Tencent plans to sell its $23.2 billion stake in Chinese food delivery giant Meituan (OTCMKTS:MPNGF) in a similar way as it sold the JD stake. Importantly, Tencent also holds a large stake in Pinduoduo (NASDAQ:PDD), and investors await the fate of the stake.
And funnily enough, another tech investor, Prosus N.V. (OTCMKTS:PROSF), is slowly offloading its stake in Tencent Holdings.
All in all, the attractiveness of the Asian tech sector seems to be dimming due to multiple headwinds. Additionally, tech investors have made big losses on their mark-to-market value holdings in both public and private companies owing to the current year’s market crash. Having said that, selling the shares helps them realize the profits as the investments were made years ago at relatively lower valuations.
