SoftBank Group Corp is set to post a gain of $34.1 billion by reducing its stake in Alibaba Group Holding from 23.7% to 14.6%. But the Japanese conglomerate will not sell its shares directly in the market. It is using a complex security called "prepaid forward contracts," which is a derivative largely used by investors.
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Once an investment darling, Alibaba (NYSE: BABA) has fallen from grace. The continued crackdown on tech companies in China, the threat of delisting, and the worsening geopolitical relationship between the U.S. and the Chinese government make the stock seem almost uninvestable. Alibaba has been a symbol of excellence and quality.