Softbank shares fall as Alibaba, Didi and Arm experience setbacks

Masayoshi Son, Founder, Chairman and Chief Executive Officer of SOFTBANK Group, announced the Group’s achievements in Tokyo on May 9, 2019.

Alessandro di Chommo | NurPhoto | Getty Images

SoftBank Group shares fell more than 8% on Monday as the value of portfolio companies continued to decline.

The stock price of the Japanese tech giant fell from 5201 yen ($ 46) to 5103 yen on the Tokyo Stock Exchange. At one point, the stock price fell to 5,062 yen, the lowest level since June 2020.

SoftBank’s share price fell for the seventh straight day during a period of uncertainty about some of the company’s biggest bets and the broader regional sale of tech stocks in Asia.

Softbank’s most valuable company, Alibaba, a Chinese e-commerce company, fell its market capitalization by billions of dollars on Monday after the company announced a restructuring.

Alibaba’s trading share in Hong Kong unveiled plans to form two new units to house its major e-commerce businesses, International Digital Commerce and China Digital Commerce, in order to be more agile and accelerate growth. , It plummeted by more than 8%. Deputy Chief Financial Officer Toby Shoe will be the new Chief Financial Officer from April.

Changes occur when Alibaba faces headwinds in many ways, including intensifying competition, economic slowdowns, and regulatory crackdowns.

Meanwhile, Softbank-backed Ride Hailing company Didi announced last week that it plans to delist from the New York Stock Exchange within six months after its IPO. A Chinese company said it plans to relist on the Hong Kong Stock Exchange.

Diddy’s stock has plummeted 57% since its IPO on June 30, closing at $ 7.80 on Friday.

Another blow to SoftBank is that it seems unlikely that more Cambridge-based chip designer Arm will sell to Nvidia.According to experts, scrutiny of the global regulations surrounding transactions has been strengthened. Currently, the chances of a deal being closed are “very low”.

According to Bloomberg, Softbank initially agreed to sell the company for $ 40 billion, but after Nvidia’s share price soared, transaction prices soared to about $ 74 billion. So if a transaction fails, the company seems to miss an important payday.

“In the middle of a snowstorm” Softbank

SoftBank reported a quarterly loss last month as the portfolio company’s share price fell, hitting the Vision Fund division by $ 10 billion.

Softbank said its shares were undervalued despite the decline in asset value and promised to invest up to ¥ 1 trillion to buy back nearly 15% of its shares.

Masayoshi Son likens Softbank to a goose that lays “golden eggs,” but the latest results highlight the headwinds of the investment business.

“We are in the midst of a blizzard,” the son said at a press conference at the time, adding that he was “not proud” of the Vision Fund’s performance this quarter. Still, he said the company is taking steady steps to double the number of “golden eggs” compared to last year.

Softbank shares fall as Alibaba, Didi and Arm experience setbacks

Source link Softbank shares fall as Alibaba, Didi and Arm experience setbacks

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