Uber shares drop as Softbank plans to sell shares to cover Didi, other losses

SoftBank is selling about one-third of its stake in ride-hailing company Uber; in part to cover losses on its investment in Chinese ride-hailing company Didi, two people familiar with the matter said.

It’s planning to sell 45 million shares, which will have a 30-day lockup.

Uber shares fell 5% in extended trading following the report.

The value of Uber’s own Didi stake declined $2 billion last week following the June debut of Didi’s American depositary shares on the New York Stock Exchange; as China reportedly planned fines and other punishments against the company amidst a broader crackdown on U.S. listed Chinese companies.

SoftBank has lost about $4 billion on its Didi position in total, CNBC’s Deirdre Bosa reported.

It’s also suffered from a decline in valuation of Alibaba; the botched Ant Group IPO, and paused plans for a ByteDance listing.

In addition, Softbank’s Masayoshi Son has increasingly been playing in public markets with its SB Northstar unit.

The news comes one week after Uber stock rose slightly after; the company’s trucking unit announced plans to acquire shipping software company Transplace from TPG Capital for around $2.25 billion.

 

Didi shares have fallen 37% from their $14.14 closing price on the stock’s first day of trading, June 30.

 

Over the same period Uber shares are down about 8%.

 

SoftBank’s own shares have also tumbled since the Didi U.S. initial public offering. The SoftBank Vision Fund owned 21.5% of Didi following its U.S. listing.

SoftBank invested in Uber in 2018. In 2019 SoftBank Vision Fund invested another $333 million in Uber.

 

As recently as March 31 Uber referred to SoftBank as “a large stockholder.”

 

Many people called SoftBank’s Uber equity purchase a failed investment; SoftBank CEO Masayoshi Son told analysts on a conference call in February, saying it was paying expensive money to a bad company.

 

“However,” he said, “as a matter of fact, as you can see that we have already made something close to ¥500 billion gain from Uber.”