"Son Jeong-ui, who was 'captivated in 5 minutes,' is his 23-year friendship with Ma Yun coming to an end?"

Masayoshi Son Decides $20 Million Investment in 10 Minutes
Alibaba Expands Business Using Investment Funds
Leaves 8 Trillion Yen Valuation Gain from NYSE Listing
Cooperation Uncertain Due to Chinese Internet Regulations

Jack Ma, founder of Alibaba Group (right), and Masayoshi Son, chairman of SoftBank (left), are having a special discussion at the 'Tokyo Forum 2019'.

[Asia Economy Reporter Lee Ji-eun] Japan's SoftBank, which has recorded its worst performance since its founding, is drawing attention as it sells its stake in Chinese online shopping company Alibaba, potentially marking the end of the 23-year relationship between the two companies.

Since SoftBank Chairman Masayoshi Son invested $20 million (approximately 25.3 billion KRW) in Alibaba founder Jack Ma in 2000, the two companies have walked a path of mutual growth in business. This sale has brought renewed focus on the success story of Chairman Son and former Chairman Ma.

According to the Nihon Keizai Shimbun on the 11th, SoftBank announced that it will sell part of its stake in Alibaba, reducing its share from 23.7% at the end of June to 14.6% by the end of September. Through this stake sale, SoftBank is expected to secure approximately $34.1 billion (about 44.43 trillion KRW) in cash.

The reason SoftBank made this decision is that it suffered its largest loss since its founding in the first quarter of fiscal year 2022 (April to June), leading to financial difficulties. SoftBank's net loss for the first quarter was 3.1627 trillion yen, marking two consecutive quarters of losses for the first time in 17 years. The Vision Fund, which was established to invest in IT companies, suffered nearly $50 billion in losses in the first half of this year due to the global stock market downturn and the decline in tech stocks, significantly impacting the deficit.

Although SoftBank stated it intends to maintain a good relationship with Alibaba, there are forecasts that the bond between the two companies will loosen following the sale. Major foreign media outlets commented on SoftBank's decision, saying, "This stake sale is partly to strengthen finances, but it also suggests that Chairman Son, known for his excellent investment sense, holds a pessimistic view of Chinese technology."

◆"Captivated by Jack Ma's Vision" Masayoshi Son Decided to Invest After a 10-Minute Conversation

Chairman Son, known for his sharp investment acumen, decided to invest in Alibaba 23 years ago because he highly valued the potential of the Chinese economy and Jack Ma's vision.

In 2000, Son, who was investing in internet companies like Yahoo, anticipated significant growth in China's internet market and traveled to China to seek investment opportunities.

Unlike other entrepreneurs, Jack Ma neither presented a business plan nor requested investment from Son. However, after just a 10-minute conversation, Son decided to invest a large sum of $20 million.

At the Tokyo Forum held in 2020, Son recalled, "Jack Ma spoke about his dreams, philosophy, and future prospects with sparkling eyes, which captivated me. I spent five minutes listening to him and five minutes convincing him how to accept my funds," reflecting on their first meeting.

Ma said he was not particularly interested in the investment funds at the time because he had already received $5 million in investments. Instead, he felt frustrated with those who doubted the potential of the internet and longed to meet entrepreneurs who shared his vision for the future of IT.

At the same forum, Ma expressed, "People who share the same ideals become friends. That person was Chairman Son. He is still a friend who fights for the future together," sharing his thoughts.

With the substantial investment from Chairman Son, Ma used it as capital to grow Alibaba into China's largest e-commerce company. In 2014, Alibaba's listing on the New York Stock Exchange brought enormous valuation gains to SoftBank. At the time of the IPO, Alibaba's estimated average corporate value was $186 billion, of which SoftBank's holding was reported to be $57.8 billion. The valuation gains from Alibaba's listing reached 8 trillion yen.

Bloomberg described SoftBank's investment as "an exceptional return even by Silicon Valley standards," adding that it "further enhances Chairman Son's reputation as one of the world's shrewdest investors."

SoftBank was able to expand its business and discover future growth engines by using the funds secured through Alibaba for new investments.

◆Strengthened Chinese Internet Regulations... Uncertain Future of Cooperation Between the Two Companies

However, the business cooperation between the two began to loosen around 2020. Son stepped down from Alibaba's board, saying he was "graduating from the most successful investment." Ma also resigned from SoftBank Group's board.

At that time, The Wall Street Journal assessed that "the 15-year cooperation forged by the two giant entrepreneurs serving on each other's company boards has ended."

Moreover, the likelihood of maintaining a cooperative relationship has further diminished following this sale. As SoftBank's stake falls below 20%, Alibaba's status has shifted from an affiliate to an investment company.

Japanese media have pointed out that with the strengthening of China's internet regulations, it is difficult to expect positive effects from cooperation with them. Currently, Chinese authorities are implementing the "Golden Shield (Jin Dun Gong Cheng)" policy, which censors internet use by its citizens under the pretext of blocking inappropriate sites.

The Nihon Keizai Shimbun stated, "China is blocking access to Facebook and YouTube, trying to confine all internet data within its borders," adding, "Chairman Son started investing in the 2000s and managed to bypass the walls of this Golden Shield, but it will be difficult to oppose government-led regulatory policies."

This content was produced with the assistance of AI translation services.