SoftBank sheds $15 billion on U.S. tech stock rout By Reuters

2/2
© Reuters. FILE PHOTO: FILE PHOTO: The logo of SoftBank Group Corp is displayed at SoftBank World 2017 conference in Tokyo

2/2

By Sam Nussey

TOKYO (Reuters) – SoftBank Group Corp (T:) shares were down 5% in afternoon trade on Wednesday, extending this week’s slump that has wiped $15 billion from its market capitalisation, as investors worried about the conglomerate’s exposure to sliding U.S. tech stocks.

The fall takes SoftBank’s share decline to 12% since sources told Reuters and other media late last week that the Japanese company made big bets on equity derivatives tied to tech firms.

Chief Executive Masayoshi Son said last month SoftBank would place cash from an asset sale programme in public stocks but the complex transactions have caused jitters among retail investors in a company already widely viewed as opaque, analysts said.

The group “needs to protect Masa’s reputation by making sure it is not seen as a short-term trading giant, which would warrant a much bigger discount,” Jefferies (NYSE:) analyst Atul Goyal wrote in a note, referring to the gap between the value of its assets and its market valuation.

SoftBank’s purchase of call options in addition to share buying, which gives access to a much higher amount of shares on paper, is seen by analysts as having exacerbated the market’s run-up and subsequent sell-off.

SoftBank has previously declined to comment on the trades.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Be the first to comment

Leave a Reply

Your email address will not be published.


*