HONG KONG â€" Yahoo isn’t the only company tagging along for Alibaba’s magic carpet ride.
Shares in Softbank, the Japanese telecommunications company, rose as much as 8 percent in Tokyo on Wednesday morning due to strong profit and revenue growth at Alibaba.
Softbank owns about 37 percent of Alibaba, the Chinese e-commerce giant that is moving forward with plans for an initial public offering in the United States that is expected to be one of the world’s biggest since Facebook raised $16 billion two years ago.
Like Yahoo, which owns 24 percent of Alibaba, Softbank’s stock has partly served as a proxy for investors seeking to bet on the Chinese company’s rapid growth. The Japanese company, controlled by the billionaire investor Masayoshi Son, invested about $20 million in Alibaba nearly 15 years ago.
Alibaba reported $1.4 billion in profit for the October to December quarter, more than double the results in the period a year earlier, Yahoo said Tuesday in a United States stock exchange filing. Revenue jumped 66 percent, to nearly $3.1 billion.
Both Softbank and Yahoo have seen significant rallies in their shares, driven partly by Alibaba’s strong growth and anticipation that the Chinese company’s I.P.O. will be a blockbuster. Softbank’s stock has risen around 75 percent in the past year, while Yahoo’s is up 42 percent.
But despite its larger stake in Alibaba, Softbank may offer less direct exposure to the Chinese company’s performance. The Japanese company is much larger than Yahoo, with a market capitalization of 8.4 trillion yen, or about $82 billion, compared with Yahoo’s $34.5 billion.
In addition to its Japanese telecommunications business, Softbank controls Sprint, the American mobile carrier, and is the biggest single shareholder of Yahoo Japan. In recent months, Softbank has been reshuffling assets among its various units, including a $3.2 billion deal last month involving Yahoo Japan â€" the nation’s biggest Internet portal â€" and eAccess, a mobile Internet service provider.
For investors whose main focus is the Alibaba I.P.O., Softbank’s other businesses are more of a distraction than attraction. That is probably one reason Softbank’s shares are cheaper than Yahoo’s, trading at about 15 times trailing earnings compared with a multiple of 28 times at Yahoo.
