Uber shares saw a good deal of slump in market value after investment firm SoftBank planned to sell about a third of its stake in the U.S. ride-sharing app.
According to one report SoftBank is selling off shares worth about $ 2bn (£ 1.44bn) to help cover for the losses it incurred by betting on Chinese ride-hailing company Didi and other similar investments.
Soft Bank To Sell 45 Million Shares
Didi’s shares have declined heavily since they started trading in the US market less than a month ago.
This is in the wake of a series of actions by Chinese authorities that have frightened the investors.
By selling 45 million shares in Uber the SoftBank Vision Fund will cut its total investment in the company by about a third.
The Japanese technology investment company has lost $ 4bn from its stake in Chinese company Didi, according to CNBC.
Why?
However, Reuters news agency reported that SoftBank’s decision to cut off its Uber investment was not related to Didi’s decline and it was Soft Bank’s intention that this was a good time to make a profit on their 2018 investment.
In 2018, SoftBank invested about $ 7.6bn into Uber and added another $ 333m to that investment the following year.
SoftBank is Didi’s largest shareholder, with more than 20% stake.
Uber also owns 13% of Didi after US-based company sold its operations in China to its local rival five years ago.
Beijing Crackdown
Chinese technology companies trading in the US, Hong Kong and mainland China have seen their market value fall sharply in recent months as Beijing cracks down and ramps up scrutiny of the sector.
Uber shares fell 5 percent in New York’s after trade hours.
