SoftBank shares tumble as portfolio companies experience setbacks
PUBLISHED MON, DEC 6 20216:05 AM EST
Sam Shead @SAM_L_SHEAD
CNBC.com
KEY POINTS
-- The Japanese tech giant’s share price fell from 5201 yen ($46) to 5103 yen on the Tokyo stock market.
-- At one point, shares fell as low as 5,062 yen, which is their lowest level since June 2020.
-- Portfolio companies including Alibaba, Arm and Didi Chuxing are all experiencing periods of uncertainty that has hit their market value.
SoftBank Group shares fell by more than 8% Monday as the value of its portfolio companies continued to slide.
The Japanese tech giant’s share price fell from 5201 yen ($46) to 5103 yen on the Tokyo stock market. At one point, shares fell as low as 5,062 yen, their lowest level since June 2020.
The fall in SoftBank’s share price, which marks its seventh consecutive day of losses, comes amid a period of uncertainty around some of the company’s biggest bets and a broader regional sell-off of tech stocks in Asia.
Chinese e-commerce firm Alibaba — SoftBank’s most valuable company — saw its market cap fall by several billion dollars Monday after the company announced a restructure.
Alibaba’s Hong Kong-traded shares plummeted over 8% after it revealed plans to form two new units to house its main e-commerce businesses — international digital commerce and China digital commerce — in a bid to become more agile and accelerate growth. It also said deputy chief financial officer Toby Xu will become the new chief financial officer from April.
The changes come as Alibaba faces headwinds on multiple fronts, including increased competition, a slowing economy and a regulatory crackdown.
Meanwhile, SoftBank-backed ride-hailing firm Didi Chuxing announced last week that it plans to de-list from the New York Stock Exchange less than six months after its IPO. The Chinese firm said it plans to relist on the Hong Kong Stock Exchange.
Shares of Didi have plunged 57% since its IPO on June 30, and closed at $7.80 on Friday.
In another blow for SoftBank, the sale of its Cambridge, U.K. based-chip designer Arm to Nvidia is looking increasing unlikely. Global regulatory scrutiny surrounding the deal has ramped up, with experts saying the deal is now “highly unlikely” to go through.
SoftBank initially agreed to sell the company for $40 billion, but the price of the deal has soared to around $74 billion following a surge in Nvidia’s share price, according to Bloomberg. As such, the company looks to miss out on a significant payday if the deal falls through.
Last month, SoftBank’s billionaire founder Masayoshi Son announced an $8.8 billion share buyback over the next year after the group’s Vision Fund reported a record quarterly loss.
SoftBank shares tumble as Alibaba, Didi and Arm experience setbacks (cnbc.com) |
