(Bloomberg) — Alibaba Group Holding Ltd. sold almost $360 million of stock in Chinese streaming platform Bilibili Inc. at a significant discount, the latest in a string of asset deals from an e-commerce pioneer seeking capital to invest in AI and rejuvenate the business.
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Alibaba priced the sale of 30.85 million Bilibili American depositary receipts at $11.60 each, according to people familiar with the matter, asking not to be named as the information is private. That’s about a 5.5% discount to the stock’s closing price on Wednesday. Bilibili plunged as much as 8.4% in Hong Kong on Friday, its biggest drop in two months.
Alibaba, for over a decade one of China’s most prolific investors in everything from retailers to startups, has over the past year begun steadily whittling down its holdings. It’s sold down shares of electric-vehicle maker XPeng Inc. as well as AI firm SenseTime Group Inc., while cutting back its stake in Hong Kong-listed ride-sharing firm GogoX Holdings Ltd.
The company is now in the midst of an overhaul intended to refocus its vast business empire on core retailing as well as technology-oriented fields from the cloud to artificial intelligence. Alibaba led major fundraisings for at least two Chinese AI startups this year even as it sold stock in more established firms, signaling its intent to stake out a space in a potentially transformative field.
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Apart from capital for investment, Alibaba is also embarking on one of the country’s largest shareholder-return programs. The company has set up a separate entity to manage its portfolio of assets around the world, which analysts regard as a vehicle for the sale of holdings. Alibaba remains a significant part-owner of major names such as Weibo Corp. and Sun Art Retail Group Ltd. It’s considering selling its InTime department store arm, Bloomberg News has reported.
During an earnings conference call in February, new Chief Executive Officer Eddie Wu pledged to increase investments in its flagship businesses, a nod to growing competitive pressures from rivals such as PDD Holdings Inc. and ByteDance Ltd. Alibaba didn’t respond to requests for comment on Thursday.
“It’s not a surprise since management has talked a lot about refocusing their core business,” said Vey-Sern Ling, managing director at Union Bancaire Privee.
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Bilibili lies somewhat outside of Alibaba’s expertise, while showing signs of fatigue from battling ByteDance’s Douyin and Kuaishou Technology.
Its mobile games unit has failed to come up with consistent hits, and reported a 12% sales decline in the December quarter. Its foray into online commerce also faces fierce competition from Douyin and Xiaohongshu. The Shanghai-based company remains in the red more than a decade since its founding.
The e-commerce giant became Bilibili’s principal shareholder in February 2019. Apart from a direct economic interest, Alibaba was a major advertiser on its video-streaming site. The two firms started collaboration on content creation in 2018, according to Bilibili’s most recent annual report.
–With assistance from Zheping Huang and Jeanny Yu.
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