Softbank shares fall seven per cent on rising tech bets
Shares in tech giant Softbank fell seven per cent as markets closed in Asia this morning, as investors were concerned by the group’s rising exposure to risky tech bets.
Softbank has plugged billions of dollars into buying shares in major tech companies on the Nasdaq, after it sold off a swath of assets over the summer.
The group has also made significant options purchases in such tech companies, sources familiar with the matter told Reuters.
Options of $4bn secured by the company have generated an exposure of about $50bn, while Softbank has made $4bn in trading gains from those bets, according to multiple media reports.
Shares in the group fell below ¥6,000 for the first time in two months, dropping to ¥5,881. The group was the biggest loser in percentage terms on Japan’s benchmark index, which closed down 0.5 per cent.
Its market value had been up by more than a third this year before its shares started to fall.
“When there is a tech bubble, [Softbank chief executive] Masayoshi Son is usually not too far away from the action,” Amir Anvarzadeh, a market strategist at Asymmetric Advisors, wrote in a note.
The fall comes after Softbank posted a surprise return to profit last month, bouncing back from a record loss to be $12bn in the black.
It reported a net profit of with a net profit of ¥1.3 trillion ($11.8bn) in the three months to the end of June.
The group’s embattled Vision Fund, known for its risky bets on tech firms such as Uber and Wework, recorded a $2.8bn profit over the quarter.