SoftBank and Prosus are selling more Alibaba and Tencent.

That’s not the best news if you own Alibaba and Tencent (which you probably do, by the way, assuming you have emerging market equity ETFs in your portfolio). SoftBank and Prosus are, of course, the largest shareholders.

Or at least they were the largest shareholders, but in SoftBank’s case, Masayoshi Son’s humbled behemoth is in the process of selling “almost all” its remaining Alibaba stake through $7.2 billion in prepaid forward contracts, the FT said Thursday, citing SEC filings.

That would come atop $29 billion in sales last year, slashing SoftBank’s stake to less than 4%. It once held more than a third.

The timing leaves something to be desired for Alibaba. The company’s plan to split into six units, and the assumption that the half-dozen autonomous operations could raise funds on their own and eventually pursue IPOs, helped rekindle some of the company’s joie de vivre after a multi-year crackdown by Xi Jinping crumbled Jack Ma’s empire.

Ma recently returned to China from quasi-exile. His ill-advised decision to critique regulators and criticize state-run banks in October of 2020 prompted Xi to ice Ant Group’s planned public offering, which would’ve been the largest in history. The rest is… well, history.

As the FT pointed out Thursday, Xi’s tech crackdown left SoftBank “selling most of its holding at prices on a par with where Alibaba opened for trading in New York eight years ago.”

Under the terms of the forward contracts, SoftBank could buy the shares back, but generally doesn’t. The group may use proceeds to buy more of its own shares back, though. Son has embarked on a campaign to bolster the stock amid large losses, and SoftBank is currently in a kind of stasis as it pursues the Arm re-listing and ponders how and when to deploy cash.

Meanwhile, Prosus is funding buybacks with sales of Tencent which, somewhat amusingly, has resorted to buybacks of its own as a way to relieve related pressure on the shares. Tencent, like Alibaba, suffered mightily under Xi’s tech crackdown. Since last summer, Prosus has cut its stake by more than 2%.

Ultimately, it’s hard to escape the notion that whatever the near-term motivation from paring stakes in China’s tech titans, one longer-term ambition may be to reduce exposure to Xi. Notwithstanding signs that the worst of the tech crackdown (executed under the banner of an anti-monopoly push) is in the rearview, “common prosperity” undermined foreign investor confidence severely.

What too many observers are loath to admit is that Xi doesn’t care all that much about foreign investors. Capital famously flows to where it’s most welcome. It (capital) doesn’t love the sight of a man dressed in a Mao suit waving his fist around and talking about “spilled blood” and “cracked heads.” That doesn’t scream “welcome capital!”

According to Bloomberg, Apple has tripled iPhone output in India to $7 billion as part of an effort to “reduce its reliance on China as tensions between Washington and Beijing continue to escalate.”